39910 Federal Register / Vol. 86, No. 139 / Friday, July 23, 2021 / Proposed Rules 

DEPARTMENT OF THE TREASURY 

Internal Revenue Service 

26 CFR Parts 1, 53, 54 and 301 

[REG–102951–16] 

RIN 1545–BN36 

Electronic-Filing Requirements for 

Specified Returns and Other 

Documents 

AGENCY: Internal Revenue Service (IRS), 

Treasury. 

ACTION: Withdrawal of notice of 

proposed rulemaking; notice of 

proposed rulemaking. 

SUMMARY: This document contains 

proposed regulations amending the 

rules for filing electronically and affects 

persons required to file partnership 

returns, corporate income tax returns, 

unrelated business income tax returns, 

withholding tax returns, and certain 

information returns, registration 

statements, disclosure statements, 

notifications, actuarial reports, and 

certain excise tax returns. The proposed 

amendments reflect changes made by 

the Taxpayer First Act of 2019 (TFA) 

and are consistent with the TFA’s 

emphasis on increasing electronic filing. 

This document also withdraws 

proposed regulations published in the 

Federal Register on May 31, 2018, 

amending the rules for determining 

whether information returns must be 

filed electronically. 

DATES: Written or electronic comments 

must be received by September 21, 

2021. The public hearing is being held 

by teleconference on September 22, 

2021 at 10 a.m. EST. Requests to speak 

and outlines of topics to be discussed at 

the public hearing must be received by 

September 21, 2021. If no outlines are 

received by September 21, 2021, the 

public hearing will be cancelled. 

Requests to attend the public hearing 

must be received by 5:00 p.m. EST on 

September 20, 2021. The telephonic 

hearing will be made accessible to 

people with disabilities. Requests for 

special assistance during the telephonic 

hearing must be received by September 

20, 2021. 

ADDRESSES: Commenters are strongly 

encouraged to submit public comments 

electronically. Submit electronic 

submissions via the Federal 

eRulemaking Portal at 

www.regulations.gov (indicate IRS and 

REG–102951–16) by following the 

online instructions for submitting 

comments. Once submitted to the 

Federal eRulemaking Portal, comments 

cannot be edited or withdrawn. The 

Department of the Treasury (Treasury 

Department) and the IRS will publish 

for public availability any comments 

submitted to its public docket. Send 

paper submissions to: CC:PA:LPD:PR 

(REG–102951–16), Room 5203, Internal 

Revenue Service, P.O. Box 7604, Ben 

Franklin Station, Washington, DC 

20044. 

FOR FURTHER INFORMATION CONTACT: 

Concerning the proposed regulations, 

call Casey R. Conrad of the Office of the 

Associate Chief Counsel (Procedure and 

Administration), (202) 317–6844; 

concerning submission of comments or 

requests for a public hearing, call Regina 

Johnson, (202) 317–5177 (not toll-free 

numbers). 

SUPPLEMENTARY INFORMATION: 

Background 

This document contains proposed 

amendments to the Regulations on 

Income Taxes (26 CFR part 1) under 

sections 1461 and 1474 of the Internal 

Revenue Code (Code), which provide 

that persons required to deduct and 

withhold tax are liable for such tax, and 

section 6050I of the Code, which 

requires persons to report information 

about financial transactions to the IRS; 

to the Regulations on Pension Excise 

Taxes (26 CFR part 54) under section 

6011 of the Code, which requires 

persons to report information for certain 

excise taxes related to employee benefit 

plans; to the Regulations on Procedure 

and Administration (26 CFR part 301) 

under sections 1474, 6011, 6012, 6033, 

6057, 6058, and 6059 of the Code for 

determining whether returns must be 

filed using magnetic media; and to the 

Regulations on Foundation and Similar 

Excise Taxes (26 CFR part 53) under 

section 6011 of the Code to remove the 

option—available to a person required 

to report certain excise taxes on Form 

4720, Return of Certain Excise Taxes 

Under Chapters 41 and 42 of the 

Internal Revenue Code—to designate a 

Form 4720 filed by a private foundation 

or trust as that person’s return if the 

foundation is reporting the same 

transaction. This document also 

withdraws proposed regulations under 

section 6011 that were published in the 

Federal Register on May 31, 2018 (May 

2018 proposed regulations), amending 

the rules for determining whether 

information returns must be filed using 

magnetic media. 

Section 6011(e) was added to the 

Code by section 319 of the Tax Equity 

and Fiscal Responsibility Act of 1982, 

Public Law 97–248, 96 Stat. 610, and 

required the Secretary of the Treasury or 

her delegate (Secretary) to prescribe 

regulations providing standards for 

determining which returns were 

required to be filed on magnetic media 

(hereinafter references to filing ‘‘in 

electronic form’’ will be used in place 

of filing ‘‘on magnetic media’’). A year 

later, the statute was amended by 

section 109 of the Interest and Dividend 

Tax Compliance Act of 1983, Public 

Law 98–67, 97 Stat. 383, to require 

information returns under sections 

6042(a) (dividends and corporate 

earnings and profits), 6044(a) (patronage 

dividends), and 6049(a) (interest), with 

respect to more than 50 payees for any 

calendar year, to be filed electronically. 

The amendment also added a waiver 

provision from electronically filing to 

any person who established undue 

hardship. 

On March 25, 1986, the Secretary first 

published guidance under section 

6011(e) with respect to the electronic 

filing requirement as § 301.6011–2 (TD 

8081), which specified Forms 1042–S, 

1098, 1099 series, 5498, 6248, 8027, W– 

2G, W–2, W–2P as the information 

returns covered by the regulation that 

had to be filed electronically unless the 

person was granted a waiver or was a 

low-volume filer. The term ‘‘lowvolume filers’’ was defined as persons 

not required to file, for any calendar 

year beginning on or after January 1, 

1987, 250 or more of the specified 

returns (other than Forms 1099–DIV, 

Dividends and Distributions; 1099– 

PATR, Taxable Distributions Received 

from Cooperatives; 1099–INT, Interest 

Income; or 1099–OID, Original Issue 

Discount). For those four Forms 1099, 

the regulation provided a special rule 

that reduced the 250-return threshold to 

50 and required that the four forms be 

aggregated for purposes of determining 

whether a person met the 50-return 

threshold. The regulation also provided 

that the Commissioner of Internal 

Revenue or his delegate (Commissioner) 

could prescribe by revenue procedure 

additional forms to be covered by the 

regulation. 

Section 6011(e) was again amended in 

1989 by section 7713, Title VII, of the 

Revenue Reconciliation Act of 1989 

(1989 Act), Public Law 101–239, 103 

Stat. 2394, to prohibit the Secretary 

from requiring any person to file returns 

electronically unless that person was 

required to file at least 250 returns 

during the calendar year. The 1989 Act 

also required the Secretary to consider 

the taxpayer’s ability to comply at 

reasonable costs with the regulation’s 

requirements. 

On June 30, 1998, the Secretary 

promulgated amending regulations 

under section 6011(e), § 301.6011–2 (TD 

8772), that removed the special rules 

related to the four Forms 1099 and 


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clarified that the 250-return threshold 

applied separately to each information 

return covered by § 301.6011–2. The 

regulation also added Forms 499R–2/ 

W–2PR, W–2VI, W–2GU, and W–2AS as 

information returns covered by the 

regulation and removed Form 6248. 

On August 5, 1997, the President 

signed into law the Taxpayer Relief Act 

of 1997, Public Law 105–34. Section 

1224 of that Act amended 6011(e)(2) by 

adding a sentence that required the 

Secretary to promulgate regulations to 

require partnerships with over 100 

partners to file returns electronically. 

On November 12, 1999, the Secretary 

promulgated regulations under section 

6011(e) relating to this special rule for 

partnerships with more than 100 

partners, § 301.6011–3 (TD 8843), 

requiring partnerships with more than 

100 partners to file partnership returns 

and all information required by the 

applicable forms and schedules 

electronically. 

On April 29, 2002, the Secretary 

promulgated regulations under section 

6011(e) (TD 8992) to add Form 1098–E 

as an information return covered by the 

regulation; on February 7, 2003, the 

Secretary promulgated regulations 

under section 6011(e) (TD 9029) to add 

Form 1098–T as an information return 

covered by the regulation. 

On November 13, 2007, the Secretary 

promulgated regulations relating to the 

requirements for filing corporate income 

tax returns and returns of organizations 

required to file returns under section 

6033 electronically under section 

6011(e), § 301.6011–5, § 301.6033–4, 

and § 301.6037–2 (TD 9363). The 

regulations specify that all returns 

required to be filed during the calendar 

year, including income tax returns, 

employment tax returns, excise tax 

returns, and information returns, are 

counted in determining whether a 

corporation or organization meets the 

250-return threshold. Sections 

301.6011–5 and 301.6037–2 apply to 

large corporations and S corporations, 

respectively, if the corporation is 

required to file at least 250 returns 

during the calendar year and the 

corporation reports total assets at the 

end of the corporation’s taxable year 

that equal or exceed $10 million on 

Schedule L of their Form 1120 ($10 

million rule). Section 301.6033–4 

applies to organizations required to file 

Form 990, Return of Organization 

Exempt From Income Tax, that have 

total assets of $10 million or more as of 

the end of the taxable year, and that are 

required to file at least 250 returns 

during the calendar year; it also applies 

to any organization (regardless of total 

assets) required to file Form 990–PF, 

Return of Private Foundation or Section 

4947(a)(1) Trust Treated as Private 

Foundation, if the organization is 

required to file at least 250 returns 

during the calendar year. 

Section 6011(e)(4) was added to the 

Code in 2010 by section 522, Title V, of 

the Hiring Incentives to Restore 

Employment (HIRE) Act, Public Law 

111–147, 124 Stat. 71, to authorize the 

Secretary to require financial 

institutions that file returns with respect 

to withholding on foreign transfers to 

file those returns electronically 

regardless of the number. On January 

28, 2013, the Secretary promulgated 

regulations under section 1474(f), 

§ 301.1474–1 (TD 9610), to require 

financial institutions defined in section 

1471(d)(5) to electronically file Form 

1042–S, Foreign Persons’ U.S. Source 

Income Subject to Withholding, 

regardless of the number of returns filed 

for the calendar year, but did not 

include in those regulations a 

requirement to electronically file Form 

1042, Annual Withholding Tax Return 

for U.S. Source Income of Foreign 

Persons. 

On March 10, 2014, the Secretary 

promulgated regulations under section 

6011(e), § 301.6011–2 (TD 9660), to add 

the Forms 1094 series and 1095 series 

as information returns covered by the 

regulation. And on December 19, 2016, 

the Secretary promulgated regulations 

under section 6011(e), § 301.6011–2 (TD 

9804), to remove the Form 1095 series 

and add Form 1095–B and Form 1095– 

C as information returns covered by the 

regulation. 

On March 23, 2018, the President 

signed into law the Tax Technical 

Corrections Act of 2018 (TTCA), Public 

Law 115–141. Section 301, div. U, title 

III, of the TTCA added a new paragraph 

(5), Special rule for partnerships, to 

section 6011(e). Section 6011(e)(5)(A), 

Partnerships permitted to be required to 

file on magnetic media, authorized the 

Secretary to lower the electronic-filing 

threshold to 200 returns and statements 

for all partnerships filing returns and 

statements relating to calendar year 

2018, reducing that number by 50 each 

year until 2023, when partnerships 

filing more than 20 returns and 

statements relating to 2022 or any 

subsequent calendar year could be 

required to file electronically. The 

TTCA also moved the rule authorizing 

the Secretary to require partnerships 

with more than 100 partners to file their 

returns electronically from section 

6011(e)(2) to new section 6011(e)(5)(B), 

Partnerships required to file on 

magnetic media. The Secretary did not 

promulgate regulations under section 

6011(e) relating to the lower electronicfiling thresholds for partnerships. 

On May 31, 2018, the Secretary 

proposed regulations under section 

6011(e) (83 FR 24948) amending 

§ 301.6011–2. The proposed regulations 

would have required that all 

information returns covered under that 

regulation, regardless of type, be 

included in determining whether the 

returns a person must file meet the 250- 

return threshold and the person must 

file the information returns 

electronically. The May 2018 proposed 

regulations also provided that corrected 

information returns would be required 

to be filed electronically if the 

corresponding original return was 

required to be filed electronically. 

On July 1, 2019, the President signed 

into law the Taxpayer First Act of 2019 

(TFA), Public Law 116–25. Section 2301 

of the TFA amended section 6011(e) by 

adding new paragraph 5 that authorizes 

the Secretary to prescribe regulations 

that decrease, in accordance with the 

TFA, the number of returns a taxpayer 

may file without being required to file 

electronically. These amendments 

included changes to the special rule for 

partnerships. Section 2301 of the TFA 

moved the rule requiring partnerships 

with more than 100 partners to file 

returns electronically from section 

6011(e)(5), titled ‘‘Partnerships required 

to file on magnetic media’’, to new 

section 6011(e)(6). Section 3101 of the 

TFA amended section 6011 to require 

any charitable or other organization 

required to file an annual return that 

relates to any tax imposed by section 

511 on unrelated business taxable 

income to file those returns in electronic 

form. Section 3101 of the TFA also 

amended section 6033 to require any 

organization required to file a return 

under section 6033 to file those returns 

in electronic form. 

On November 19, 2020, the Secretary 

promulgated regulations under section 

529A of the Code, which amended a 

regulation under section 6011(e) of the 

Code, § 301.6011–2 (TD 9923), to add 

the Forms 5498–ESA, Coverdell ESA 

Contribution Information, 5498–QA, 

ABLE Account Contribution 

Information, and 5498–SA, HSA, Archer 

MSA, or Medicare Advantage MSA 

Information, as information returns 

covered by the regulation. 

On December 20, 2019, the President 

signed into law the Setting Every 

Community Up for Retirement 

Enhancement Act of 2019 (SECURE 

Act), enacted as part of the Further 

Consolidated Appropriations Act, 2020, 

Public Law 116–94, div. O. Section 202 

of the SECURE Act allows a group of 

plans to file a single aggregated annual 


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39912 Federal Register / Vol. 86, No. 139 / Friday, July 23, 2021 / Proposed Rules 

return or report for plan years beginning 

after December 31, 2021. Section 202(d) 

of the SECURE Act clarifies the 

electronic-filing requirements for these 

deferred compensation plans. Section 

202 of the SECURE Act also added to 

section 6011 a second paragraph (e)(6), 

although the headings of the two 

paragraphs (e)(6) differ. The one moved 

to paragraph (e)(6) by the TFA is titled 

‘‘Partnerships required to file on 

magnetic media.’’ The one added by the 

SECURE Act is titled ‘‘Application of 

numerical limitation to returns related 

to deferred compensation plans’’ and 

treats information regarding each plan 

for which information is provided on a 

return required to be filed under section 

6058 of the Code as a separate return for 

purposes of determining the number of 

returns a taxpayer may file without 

being required to file electronically. 

These proposed regulations do not 

address amendments made by section 

202(d) of the SECURE Act. 

Explanation of Provisions 

1. Scope of the Proposed Regulations for 

Filing Returns Electronically 

These proposed regulations would 

impose electronic-filing requirements 

on persons required to file certain 

returns as authorized by the TFA by 

amending the following regulations: 

(1) § 301.6011–2, Required use of 

electronic form, which prescribes 

standards for determining whether 

certain information returns must be 

filed electronically; 

(2) § 1.6045–2, Furnishing statement 

required with respect to certain 

substitute payments, which requires 

persons to report certain substitute 

payments; 

(3) § 1.6045–4, Information reporting 

on real estate transactions with dates of 

closing on or after January 1, 1991, 

which requires persons to report on real 

estate transactions; 

(4) § 1.6050I–0, Table of contents, 

which lists the major captions that 

appear in §§ 1.6050I–1 and 1.6050I–2; 

(5) § 1.6050I–1, Returns relating to 

cash in excess of $10,000 received in a 

trade or business, which requires 

persons to report information about 

these financial transactions to the IRS; 

(6) § 1.6050I–2, Returns relating to 

cash in excess of $10,000 received as 

bail by court clerks, which requires 

persons to report information about 

these financial transactions to the IRS; 

(7) § 1.6050M–1, Information returns 

relating to persons receiving contracts 

from certain Federal executive agencies, 

which requires certain Federal 

executive agencies to report information 

with respect to each contract entered 

into by that agency; 

(8) § 301.6721–1, Failure to file 

correct information returns, which 

provides the penalty for failure to file 

correct information returns; 

(9) § 301.6011–3, Required use of 

electronic form for partnership returns, 

which prescribes standards for 

determining whether a partnership must 

file its partnership return electronically; 

(10) § 301.6011–5, Required use of 

electronic form for corporate income tax 

returns, which prescribes standards for 

determining whether a corporation must 

file its corporate income tax returns 

electronically; 

(11) § 1.6037–2, Required use of 

electronic form for income tax returns of 

electing small business corporations, 

which prescribes standards for 

determining whether an electing smallbusiness corporation (S corporation) 

must file its S corporation return 

electronically; 

(12) § 301.6037–2, Required use of 

electronic form for returns of electing 

small business corporations, which 

prescribes standards for determining 

whether an electing small-business 

corporation (S corporation) must file its 

S corporation return electronically; 

(13) § 1.6033–4, Required filing in 

electronic form for returns by 

organizations required to file returns 

under section 6033, which prescribes 

standards for filing returns required to 

be filed electronically under 

§ 301.6033–4; 

(14) § 301.6033–4, Required filing in 

electronic form for returns by 

organizations required to file returns 

under section 6033, which prescribes 

standards for determining whether 

returns by organizations required to file 

a return under section 6033 must be 

filed electronically; 

(15) § 53.6011–1, General requirement 

of return, statement or list, which 

requires persons subject to certain 

enumerated excise taxes under Chapter 

42 of the Code to file a Form 4720 to 

accompany payment of those excise 

taxes; 

(16) § 301.6057–3, Required use of 

electronic form for filing requirements 

relating to deferred vested retirement 

benefit, which prescribes standards for 

determining whether a registration 

statement required to be filed under 

section 6057(a) or a notification 

required to be filed under section 

6057(b) must be filed electronically; 

(17) § 301.6058–2, Required use of 

electronic form for filing requirements 

relating to information required in 

connection with certain plans of 

deferred compensation, which 

prescribes standards for determining 

whether a return required to be filed 

under section 6058 with respect to an 

employee benefit plan must be filed 

electronically; and 

(18) § 301.6059–2, Required use of 

electronic form for filing requirements 

relating to periodic report of actuary, 

which prescribes standards for 

determining whether an actuarial report 

required to be filed under section 6059 

with respect to an employee benefit 

plan must be filed electronically. 

The proposed regulations would also 

create the following new regulations 

that impose an electronic-filing 

requirement: 

(1) § 301.6011–10, Certain 

organizations, including trusts, required 

to file unrelated business income tax 

returns in electronic form, which 

requires certain organizations, including 

trusts, to file their unrelated business 

income tax returns electronically; 

(2) § 301.6011–11, Required use of 

electronic form for certain returns for 

tax-advantaged bonds, which prescribes 

standards for determining whether a 

return for credit payments to issuers of 

qualified bonds must be filed 

electronically; 

(3) § 301.6011–12, Required use of 

electronic form for returns of certain 

excise taxes under chapters 41 and 42 

of the Internal Revenue Code, which 

prescribes standards for determining 

whether an excise tax return on Form 

4720 must be filed electronically; 

(4) § 301.6011–13, Required use of 

electronic form for split-interest trust 

returns, which prescribes standards for 

determining whether an information 

return on Form 5227 must be filed 

electronically; 

(5) § 301.6011–14, Required use of 

electronic form or other machinereadable form for material advisor 

disclosure statements, which prescribes 

standards for determining whether a 

material advisor disclosure statement on 

Form 8918 must be filed electronically 

or in other machine-readable form; 

(6) § 301.6012–2, Required use of 

electronic form for income tax returns of 

certain political organizations, which 

prescribes standards for determining 

whether an income tax return on Form 

1120–POL must be filed electronically; 

(7) § 54.6011–3, Required use of 

electronic form for the filing 

requirements for the return for certain 

excise taxes related to employee benefit 

plans, which prescribes standards for 

determining whether an income tax 

return on Form 5330, Return of Excise 

Taxes Related to Employee Benefit 

Plans, must be filed electronically; and 

(8) § 301.6011–15, Required use of 

electronic form for withholding tax 

returns, which prescribes standards for 

determining whether an income tax 


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return filed by a withholding agent on 

Form 1042 must be filed electronically. 

In addition, the proposed regulations 

would amend the following regulations 

regarding the filing requirements of 

withholding agents: 

(1) § 1.1461–1, Payment and returns of 

tax withheld, which prescribes 

requirements for withholding agents to 

file returns with respect to U.S. source 

income of foreign persons; 

(2) § 1.1471–0, Outline of regulation 

provisions for sections 1471 through 

1474, which lists the major captions that 

appear in §§ 1.1471–1 through 1.1474– 

7 and § 301.1474–1; 

(3) § 1.1474–1, Liability for withheld 

tax and withholding agent reporting, 

which provides rules for withholding 

agents making payments under chapters 

3 or 4 of the Code; and 

(4) § 301.1474–1, Required use of 

electronic form for financial institutions 

filing Form 1042–S or Form 8966, 

which provides rules for withholding 

agents making payments under chapter 

4 of the Code. 

The regulations proposed in this 

document include reordering and 

renumbering of paragraphs when 

necessary for clarification and logic. In 

addition, cross references have been 

updated, and typographical, 

grammatical, and punctuation 

corrections have been made. 

As many of these regulations 

imposing electronic-filing requirements 

also provide a waiver from 

electronically filing to any person who 

establishes undue hardship, the 

Treasury Department and the IRS 

request comments on how the hardship 

waiver procedures should be 

administered, including suggestions for 

revising the procedures for requesting, 

and criteria for granting, a hardship 

waiver. 

2. Proposed § 301.6011–2, Rules for 

Filing Certain Information Returns 

Electronically 

These proposed regulations would 

amend § 301.6011–2 as discussed in 

detail in the following sections 2.A 

though 2.G. 

A. Additional Information Returns 

Required To Be Filed Electronically 

i. Forms 1098–C and 1098–Q 

Section 301.6011–2(b)(1) provides a 

list of information returns required to be 

filed electronically in accordance with 

§ 301.6011–2. Among those returns are 

three in the Form 1098 series: Form 

1098, Mortgage Interest Statement; Form 

1098–E, Student Loan Interest 

Statement; and Form 1098–T, Tuition 

Statement, added to § 301.6011–2(b)(1) 

by, respectively, TD 8081 (March 25, 

1986), TD 8992 (April 29, 2002), and TD 

9029 (February 7, 2003). After those 

three forms were added to § 301.6011– 

2(b)(1), the IRS created additional 

returns in the Form 1098 series: Form 

1098–C, Contributions of Motor 

Vehicles, Boats, and Airplanes; and 

Form 1098–Q, Qualifying Longevity 

Annuity Contract Information. These 

two additional 1098 series forms, as 

well as the three currently listed in 

§ 301.6011–2(b), are all filed and 

furnished by larger organizations and 

institutions that generally electronically 

file returns even when not required to 

do so by § 301.6011–2. Based on the size 

and sophistication of the entities that 

file these forms and the accessibility 

and availability of electronic filing, the 

Treasury Department and the IRS have 

determined that filers of Forms 1098–C 

and 1098–Q are unlikely to incur 

unreasonable costs to electronically file 

these returns. Thus, the proposed 

regulations would amend § 301.6011– 

2(b)(1) to add Forms 1098–C and 1098– 

Q to the list of information returns 

covered by § 301.6011–2(b). 

ii. Forms 3921 and 3922 

The proposed regulations would also 

amend § 301.6011–2(b)(1) to add the 

Form 3921, Exercise of an Incentive 

Stock Option Under Section 422(b), and 

Form 3922, Transfer of Stock Acquired 

Through an Employee Stock Purchase 

Plan Under Section 423(c). These forms 

are filed and furnished by sophisticated 

taxpayers that generally electronically 

file returns even when not required to 

do so by § 301.6011–2. Based on the 

sophistication of these filers and the 

accessibility and availability of 

electronic filing, the Treasury 

Department and the IRS have 

determined that filers of Forms 3921 

and 3922 are unlikely to incur 

unreasonable costs to electronically file 

these returns. 

iii. Form 1097–BTC 

The proposed regulations would also 

amend § 301.6011–2(b)(1) to add the 

Form 1097–BTC, Bond Tax Credit. This 

form is filed and furnished by bond 

issuers with respect to certain tax credit 

bonds. For the reasons discussed in this 

preamble, the Treasury Department and 

the IRS have determined that filers of 

Form 1097–BTC should not incur any 

unreasonable costs to electronically file 

this return. See section 2.D., 

Aggregation of returns to determine 

whether the electronic-filing threshold 

is met. Proposed § 301.6011–2 would 

allow for a waiver of the electronic 

filing requirements for Form 1097–BTC 

if hardship is shown in a request for 

waiver made in accordance with the 

regulation. 

B. Form 8300 Required To Be Filed 

Electronically 

Form 8300, Report of Cash Payments 

Over $10,000 Received in a Trade or 

Business, is a dual-purpose form, 

designed to meet both the section 6050I 

reporting requirement and, since 

January 1, 2002, a similar Bank Secrecy 

Act (BSA) reporting requirement found 

in 31 U.S.C. 5331 and 31 CFR 1010.330. 

Generally, any person in a trade or 

business who receives more than 

$10,000 in cash in a single transaction 

or related transactions must file Form 

8300. The IRS uses the information on 

the Form 8300 for civil and criminal tax 

administration and compliance. The 

Financial Crimes Enforcement Network 

(FinCEN) relies on up-to-date Form 

8300 filings for law enforcement, 

reporting, and statistical purposes. The 

instructions on Form 8300 state that 

filers can file the form either on paper 

with the IRS or electronically through 

FinCEN’s BSA E-Filing System. 

Approximately 250,000 of the 300,000 

Forms 8300 filed during each calendar 

year from 2015 to 2018 were filed on 

paper with the IRS. IRS employees 

manually input data from the paperfiled Forms 8300 into FinCEN’s BSA EFiling System. This procedure requires 

significant resources to be spent on 

processing and data entry. Manual data 

entry can cause delays in the input and 

retrieval of data, affecting the timeliness 

of information available for law 

enforcement and other users to detect 

potential money laundering, terrorist 

financing, and other tax and financial 

fraud. 

These proposed regulations would 

require filers who are required to file at 

least the applicable number of returns 

identified in paragraphs (b)(1) and (b)(2) 

of proposed § 301.6011–2 during the 

calendar year to also file their Forms 

8300 electronically, as directed by the 

form’s instructions. This requirement 

would increase the timeliness and 

accuracy of data entry, reduce postage 

costs, promote IT modernization efforts, 

reallocate IRS staff for priority 

assignments, and provide IRS criminal 

and civil investigators and other 

agencies with access to the data with 

up-to-date and accurate information. 

Electronic filing would also protect 

against possible future disruption and 

delays in processing paper-filed Forms 

8300. It is anticipated that the form will 

direct filers to use FinCEN’s BSA EFiling system (https://bsaefiling.fincen.

treas.gov/main.html), which is an 

internet-based secure system with no 

cost to the user. The only technical 


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39914 Federal Register / Vol. 86, No. 139 / Friday, July 23, 2021 / Proposed Rules 

requirement of the BSA E-Filing System 

is to have an internet connection for 

access to the system. Nonetheless, the 

proposed regulations would continue to 

allow the Commissioner to waive the 

requirement to file information returns 

electronically if the request for waiver 

demonstrates hardship. The principal 

factor in determining hardship will be 

the extent, if any, to which the cost of 

electronically filing Form 8300 exceeds 

the cost of filing Form 8300 on paper. 

The proposed regulations would also 

edit the example in § 1.6050I–1(d)(2)(iv) 

to provide additional clarity for the rule 

illustrated in that example. 

C. Amending the Electronic-Filing 

Threshold 

Under section 6011(e)(1), the 

Secretary must prescribe regulations 

providing standards for determining 

which returns must be filed 

electronically. Section 6011(e)(2)(A), 

however, until it was amended by the 

TFA, prevented the Secretary from 

requiring any person to file returns 

electronically unless the person was 

required to file at least 250 returns 

during the calendar year. Section 2301 

of the TFA amended section 6011(e), 

changing the statutory 250-return 

threshold to a decreasing number over 

several years, as set forth in new section 

6011(e)(5). In accordance with section 

2301 of the TFA, these proposed 

regulations would amend § 301.6011– 

2(c)(1)(i), which currently provides that 

no person is required to electronically 

file an information return covered under 

§ 301.6011–2(b) unless the person is 

required to file 250 or more returns 

during the calendar year. The proposed 

amendments would remove references 

to the 250-return threshold in 

§ 301.6011–2(c)(1)(i) and add a new 

paragraph (c)(3)(i) to § 301.6011–2 that, 

in accordance with the TFA, reduces the 

electronic-filing threshold for 

information returns covered under 

§ 301.6011–2(b) from 250 to 100, for 

returns required to be filed during 

calendar year 2022, and from 100 to 10, 

for returns required to be filed during 

calendar years after 2022. 

Information returns are generally 

required to be filed between January and 

March of the year following the calendar 

year to which such returns relate. See 

sections 6071(b) and (c). If a taxpayer 

has, for example, 13 employees in 

calendar year 2022 and is required to 

file Forms W–2 for those employees 

during calendar year 2023, that taxpayer 

would, under these proposed 

regulations, be required to file those 13 

Forms W–2 electronically. 

The proposed incremental step-down 

from 250 to 100 for information returns 

required to be filed during calendar year 

2022, and then from 100 to 10 for 

information returns required to be filed 

after 2022, will allow the IRS time to 

ensure it has sufficient resources and 

updated programming to seamlessly 

handle and process the increased 

volume of electronically-filed 

information returns and the applications 

required to file those information 

returns electronically. 

The Treasury Department and the IRS 

expect that by calendar year 2023 the 

IRS will be prepared to handle and 

process the anticipated increased 

volume of returns and applications, and 

that no further incremental step-down 

would be necessary if these proposed 

regulations are finalized and applicable 

to returns required to be filed during 

calendar year 2023. Consequently, 

persons required to file at least 10 

information returns during the calendar 

year 2023 would be required to file 

those returns electronically. The 

Treasury Department and the IRS 

request comments on why persons 

required to file at least 10 information 

returns during the calendar year 2023 

would not be able to file those returns 

electronically during that calendar year 

and whether the Treasury Department 

and the IRS should provide an 

incremental step-down to 100 for 

information returns required to be filed 

during calendar year 2023, and then 

from 100 to 10 for information returns 

required to be filed during calendar 

years after 2023. 

D. Aggregation of Returns To Determine 

Whether the Electronic-Filing Threshold 

Is Met 

Section 301.6011–2(c)(1)(iii) provides 

that each type of information return 

covered under § 301.6011–2(b) is 

considered separately for purposes of 

determining whether a person meets the 

250-return electronic-filing threshold. 

Therefore, different types of information 

returns are not counted in the aggregate 

for purposes of determining whether a 

person is required to file a number of 

returns that equals or exceeds the 250- 

return electronic-filing threshold during 

the calendar year (non-aggregation rule). 

These proposed regulations would 

remove the non-aggregation rule from 

§ 301.6011–2(c)(1)(iii). Section 6011(e) 

does not prohibit the aggregation of 

information returns of different types in 

determining whether a person meets the 

electronic-filing threshold during a 

calendar year. When the regulations 

specifically providing for nonaggregation were published in 1998, 

electronic filing was still in the early 

stages of development and not as 

commonly used as it is today. Both the 

250-return limitation that Congress had 

included in the 1989 amendment to 

section 6011(e) and the non-aggregation 

rule that the Secretary prescribed 

helped ensure that electronic-filing 

burdens and costs were appropriate, 

given the existing limits and 

accessibility to electronic-filing 

technology at that time. 

Since that time, electronic filing has 

become more common, accessible, and 

economical, as evidenced by the 

prevalence of tax-return preparers and 

third-party service providers who offer 

return-preparation and electronic-filing 

services, by the availability of taxreturn-preparation software, and by the 

numbers of returns already being filed 

electronically on a voluntary basis. In 

2018, for example, approximately 98.5 

percent of information returns were 

filed electronically. Moreover, 

electronic filing increases the IRS’s 

timeliness and accuracy in processing 

return information, which, in turn, 

provides faster and better customer 

service to taxpayers with respect to 

those returns. 

In light of the prevalence of electronic 

filing and Congress’s enactment of the 

TFA, which significantly expanded the 

Secretary’s authority to prescribe 

regulations requiring persons to file 

returns electronically, the Treasury 

Department and the IRS have 

determined that the non-aggregation 

rule is no longer necessary and propose 

to remove it from § 301.6011–2(c). The 

proposed regulations would add a new 

paragraph (c)(4)(i) to § 301.6011–2 to 

provide that a person required to file 

original information returns of any type 

covered by § 301.6011–2(b)(1) and (b)(2) 

must count all those returns together to 

determine whether the person meets or 

exceeds the electronic-filing threshold 

for the relevant calendar year. 

The proposed regulations do not 

include Forms 8300 in the aggregation 

rule, and no Form 8300 would be 

included in determining whether a 

person is required to file the applicable 

number of information returns. A Form 

8300 generally must be filed within 15 

days after a reportable payment of more 

than $10,000 is received. A filer may not 

know the number of Forms 8300 it will 

file in a calendar year until after the 

year is over, because the filer will not 

know how many cash transactions over 

$10,000 will occur during the year. On 

the other hand, other information 

returns described in § 301.6011–2(b)(1) 

and (2) do not need to be filed until after 

the calendar year of the event being 

reported. A filer of those other 

information returns will therefore know 

at the beginning of the calendar year 

whether the filer is required to file at 


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least the applicable number of those 

other information returns because those 

returns relate to the preceding calendar 

year. Thus, the Treasury Department 

and the IRS propose to require 

electronic filing of Forms 8300 only if 

the filer is required to file other 

information returns electronically. 

Under these proposed regulations, 

filers would generally understand early 

in the calendar year their electronicfiling obligations for Forms 8300 

without an unduly complex aggregation 

rule. In addition, these proposed 

regulations are consistent with the 

TFA’s emphasis on development, 

improvement, and expansion of modern 

technology (see, for example, ‘‘An Act 

To amend the Internal Revenue Code of 

1986 to modernize and improve the 

Internal Revenue Service, and for other 

purposes’’ and ‘‘Subtitle B— 

Development of Information 

Technology’’ under ‘‘Title II—21st 

Century IRS’’), and are within the 

Secretary’s expanded authority under 

the TFA to prescribe regulations 

requiring persons to file returns 

electronically. 

E. Corrected Returns Must Be Filed in 

the Same Manner as the Original Return 

Section 301.6011–2 provides that the 

non-aggregation rule applies separately 

to each type of corrected information 

return covered by § 301.6011–2(b) such 

that, for purposes of determining 

whether a person meets the 250-return 

electronic-filing threshold, corrected 

information returns are counted 

separately from original information 

returns, and each type of corrected 

information return is counted 

separately. 

The Treasury Department and the IRS 

have determined that, to increase the 

IRS’s timeliness and accuracy in 

processing information returns, if 

persons are required to file original 

information returns electronically, they 

must file any corresponding corrected 

information returns electronically. 

Likewise, if persons permitted to file 

information returns on paper file those 

information returns on paper, they must 

also file any corresponding corrected 

information returns on paper. As 

discussed in the next three paragraphs, 

this will increase the IRS’s efficiency in 

processing returns and should not cause 

taxpayers to incur unreasonable costs. 

Paper information returns are 

generally filed at one of three different 

IRS Submission Processing Centers, 

depending on the filer’s legal residence 

(for individuals) or principal place of 

business (for entities). When the IRS 

receives paper returns, it must convert 

the return to an electronic-data record 

before it can use the information 

effectively. Electronic information 

returns, on the other hand, do not go 

through Submission Processing Centers; 

they are generally filed through the 

IRS’s Filing Information Returns 

Electronically (FIRE) system or 

Affordable Care Act Information Returns 

(AIR) system, depending on the type of 

return. 

Because the procedures for processing 

electronic returns and paper returns are 

different, when an original return is 

filed on paper and a corrected return is 

filed electronically shortly thereafter, 

the IRS may not have finished 

processing the original paper return 

before the electronic return is received. 

The IRS is thus not able to reconcile 

differences as quickly as when the 

original and corrected returns are filed 

in the same manner. Similar processing 

issues arise when an original return is 

filed electronically and the corrected 

return is filed on paper. 

This proposed requirement will not 

result in any additional costs or burdens 

on taxpayers with respect to electronic 

filing because a filer who filed the 

original return electronically has the 

software necessary to file a corrected 

return electronically. Thus, the 

proposed regulations would add new 

paragraphs (c)(4)(ii)(A) and (c)(4)(ii)(B) 

to § 301.6011–2 to provide that 

corrected information returns must be 

filed electronically if the corresponding 

original return was required to be filed 

electronically, and that corrected 

returns must be filed on paper if the 

corresponding original return was 

permitted to be, and was, filed on paper. 

In addition, the proposed regulations 

would amend § 301.6721–1(a)(2)(ii), as 

discussed under section 5, Proposed 

§ 301.6721–1, Rules Relating to 

Penalties for Failure to File Correct 

Information Returns, to provide that a 

failure to file a corrected information 

return in the same manner as the 

corresponding original will be deemed a 

failure to correct the corresponding 

original information return. 

F. Special Electronic-Filing Threshold 

for Partnerships of Any Size 

Section 2301 of the TFA amended the 

special rule for partnerships in section 

6011(e)(5) to authorize the Secretary to 

reduce the electronic-filing threshold for 

partnerships required to file returns. 

The amended special rule for 

partnerships authorized the Secretary to 

reduce the electronic-filing threshold at 

an accelerated rate when compared to 

the general electronic-filing threshold, 

phasing out this special rule for 

partnerships for returns required to be 

filed during calendar years after 2021. 

These proposed regulations do not 

include a special electronic-filing 

threshold for partnerships because the 

final regulations are not expected to be 

applicable before the 2022 filing season, 

at which point the special rule for 

partnerships will be phased out. For all 

the reasons discussed in this preamble, 

the proposed regulations would reduce, 

for all persons, including partnerships, 

the electronic-filing threshold for 

information returns covered under 

§ 301.6011–2(b) from 250 to 100, for 

returns required to be filed during 

calendar year 2022, and from 100 to 10, 

for returns required to be filed during 

calendar years after 2022. See section 

2.C., Amending the electronic-filing 

threshold. 

G. Special Electronic-Filing Rule for 

Partnerships Having More Than 100 

Partners 

Paragraph (6) of section 6011(e), as 

that section was amended by the TFA, 

provides, ‘‘Notwithstanding paragraph 

(2)(A), the Secretary shall require 

partnerships having more than 100 

partners to file returns on magnetic 

media’’ (100-partner rule). The statute 

uses the general term ‘‘returns’’ without 

specifying the type of returns that must 

be filed electronically. But the 

legislative history of the Taxpayer Relief 

Act of 1997, which added the 100- 

partner rule to section 6011(e), mentions 

the rule’s application only with respect 

to partnership returns. H.R. Rep. No. 

105–220, at 675 (1997) (Conf. Rep.) 

(‘‘The House bill provides generally that 

any partnership is required to provide 

the tax return of the partnership (Form 

1065), as well as copies of the 

schedule[s] sent to each partner (Form 

K–1), to the Internal Revenue Service on 

magnetic media. An exception is 

provided for partnerships with 100 or 

fewer partners.’’). 

In accordance with this legislative 

history, the Secretary promulgated 

regulations in 1999, § 301.6011–3 (TD 

8843), requiring partnerships with more 

than 100 partners to file partnership 

returns and all other information 

required by the applicable forms and 

schedules electronically. 

In 2018, however, Congress enacted 

the TTCA and moved this 100-partner 

rule from section 6011(e)(2), where it 

appeared as flush language under the 

250-threshold limitation, to a new 

subparagraph (B) under section 

6011(e)(5), ‘‘Special rules for 

partnerships.’’ There is no legislative 

history to the 2018 TTCA that explains 

why Congress moved the 100-partner 

rule. But after the TTCA was enacted, 

the Joint Committee on Taxation 

describes the rule with respect to 

‘‘returns,’’ rather than ‘‘tax return of the 


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39916 Federal Register / Vol. 86, No. 139 / Friday, July 23, 2021 / Proposed Rules 

partnership (Form 1065),’’ which is how 

the legislative history of the Taxpayer 

Relief Act of 1997 described it. Staff of 

the J. Comm. On Taxation, Technical 

Explanation of the Revenue Provisions 

of the House Amendment to the Senate 

Amendment to H.R. 1625, at 52 (JCX–6– 

18) (‘‘Present law requires that . . . . 

partnerships having more than 100 

partners are required to file returns 

electronically.’’). In 2019, a year after 

TTCA moved the 100-partner rule, 

Congress, in Title II of the TFA, under 

Subtitle D, ‘‘Expanded Use of Electronic 

Systems,’’ again moved the 100-partner 

rule to a new paragraph (6) under 

section 6011(e), ‘‘Partnerships required 

to file on magnetic media.’’ 

In light of the Joint Committee on 

Taxation’s referring to ‘‘returns’’ in 

general in describing this provision of 

the TTCA, the TFA’s emphasis on 

development, improvement, and 

expansion of modern technology, as 

discussed in this preamble, the TFA’s 

emphasis on electronic filing (see 

‘‘Subtitle D—‘‘Expanded Use of 

Electronic Systems’’ under Title II), and 

the accessibility and prevalence of 

electronic filing, the Treasury 

Department and the IRS propose to add 

a new paragraph (c)(3)(ii)(B) to 

§ 301.6011–2 to require partnerships 

with more than 100 partners to file their 

information returns covered by 

§ 301.6011–2(b) electronically, 

regardless of the number of information 

returns being filed. 

3. Proposed § 1.6050I–0, Table of 

Contents, and § 1.6050I–1, Returns 

Relating to Cash in Excess of $10,000 

Received in a Trade or Business 

Section 1.6050I–1(e)(1) provides that 

Form 8300 must be filed with the IRS 

by the 15th day after the date cash in 

excess of $10,000 is received in a trade 

or business. Section 1.6050I–1(e)(3) 

provides that Form 8300 must be filed 

by mailing it to the address shown in 

the instructions on the form. For all the 

reasons discussed in this preamble, the 

proposed regulations would remove 

references to mailing Form 8300 to the 

IRS and require that the form be filed as 

directed by the form’s instructions. See 

section 2.B., Form 8300 required to be 

filed electronically; section 2.C., 

Amending the electronic-filing 

threshold; and section 2.D., Aggregation 

of returns to determine whether the 

electronic-filing threshold is met. The 

instructions to Form 8300 will explain 

how to file the form electronically. The 

proposed regulations would also update 

outdated citations in § 1.6050I–0 and 

§ 1.6050I–1 that cross-reference to the 

regulations under Title 31 of the CFR 

and clarify the example in § 1.6050I– 

1(d)(2)(iv). 

4. Proposed § 1.6050I–2, Returns 

Relating to Cash in Excess of $10,000 

Received as Bail by Court Clerks 

Section 1.6050I–2(c)(1)(i) provides 

that Form 8300 must be filed with the 

IRS by the 15th day after the date cash 

bail in excess of $10,000 is received. 

Section 1.6050I–2(c)(3)(i) provides that 

Form 8300 must be filed with the IRS 

office designated in the instructions on 

the form. For all the reasons discussed 

in this preamble, the proposed 

regulations would remove references to 

filing Form 8300 with a specific IRS 

office and require that the form be filed 

as directed by the form’s instructions. 

See section 2.B., Form 8300 required to 

be filed electronically; section 2.C., 

Amending the electronic-filing 

threshold; and section 2.D., Aggregation 

of returns to determine whether the 

electronic-filing threshold is met. The 

instructions to Form 8300 will explain 

how to file the form electronically. 

5. Proposed § 301.6721–1, Rules 

Relating to Penalties for Failure To File 

Correct Information Returns 

Paragraph (a)(2)(ii) of § 301.6721–1, 

Failure to file correct information 

returns, states that no penalty will be 

imposed solely by reason of failing to 

file electronically, except to the extent 

that a failure occurs with respect to 

more than 250 returns. In accordance 

with changes made to the 250-return 

threshold by section 2301 of the TFA, 

the proposed amendments to 

§ 301.6721–1 would remove references 

to a 250-return threshold with respect to 

penalties for failure to file correct 

information returns. 

Section 301.6721–1(a)(2)(ii) also states 

that the threshold requirements apply 

separately to original and corrected 

returns, such that a filer that files 300 

returns on Form 1099–DIV and later 

files 70 corrected returns on Form 1099– 

DIV could file the corrected returns 

either on the prescribed paper form 

(because they fall below the 250- 

threshold requirement) or electronically. 

For the reasons discussed in this 

preamble, the Treasury Department and 

the IRS propose to remove this rule 

because they have determined that 

corrected returns should be filed 

electronically if the corresponding 

original returns were so filed. See 

section 2.E., Corrected returns must be 

filed in the same manner as the original 

return. These proposed regulations 

would thus amend § 301.6721–1(a)(2)(ii) 

to provide that a failure to file a 

corrected information return in the same 

manner as the corresponding original 

will be deemed a failure to correct the 

corresponding original information 

return such that the filer will not receive 

the benefit of a reduced penalty under 

§ 301.6721–1(b) for that corrected 

information return. 

6. Proposed § 301.6011–3, Rules for 

Filing Partnership Returns 

Electronically 

Section 301.6011–3 prescribes 

standards for determining whether a 

partnership must file its partnership 

return electronically. In 2018, the TTCA 

amended section 6011(e) to authorize 

the Secretary to incrementally reduce, 

by regulation, the electronic-filing 

threshold for partnerships. When 

section 2301 of the TFA amended that 

particular statute again in 2019, to 

further reduce the electronic-filing 

threshold for partnerships, the Secretary 

had not yet promulgated regulations to 

implement that reduced-threshold rule 

for partnerships. As discussed in this 

preamble, these proposed regulations do 

not include a special electronic-filing 

threshold for partnerships because the 

final regulations are not expected to be 

applicable before the 2022 filing season, 

at which point the special rule for 

partnerships will be phased out. See 

section 2.F., Special electronic-filing 

threshold for partnerships of any size. 

For returns required to be filed during 

calendar years after 2021, section 2301 

of the TFA authorizes the Secretary to 

reduce the electronic-filing threshold to 

10 for all persons, including 

partnerships. These proposed 

regulations would amend § 301.6011– 

3(a) to reduce the electronic-filing 

threshold to 10 returns for any 

partnership, in accordance with section 

6011(e), as amended by the TFA. In 

addition, for all the reasons discussed in 

this preamble, the proposed regulations 

would add a new paragraph (a)(5) to 

§ 301.6011–3 that provides that all 

returns of any type, including 

partnership returns, excise-tax returns, 

employment-tax returns, and 

information returns (but not including 

schedules required to be attached to or 

included with a partnership return), are 

counted in the aggregate for purposes of 

determining whether a partnership of 

any size meets the electronic-filing 

threshold of 10 returns in a calendar 

year, and thus must file its partnership 

return electronically. See sections 2.D., 

Aggregation of returns to determine 

whether the electronic-filing threshold 

is met; and 2.G., Special electronicfiling rule for partnerships having more 

than 100 partners. These rules relating 

to the requirements for determining 

when a partnership is required to file its 

partnership return electronically do not 


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limit the application of any other statute 

affecting partnership returns that must 

be filed electronically, such as section 

6033(n), which requires a partnership 

return filed by a section 501(d) apostolic 

organization to be filed electronically. 

7. Proposed § 301.6011–5, Rules for 

Filing Corporate Income Tax Returns 

Electronically 

Section 301.6011–5 prescribes 

standards for determining whether a 

corporation must file its income tax 

returns electronically and requires large 

corporations to file the corporate 

income tax return electronically if the 

corporation is required to file during the 

calendar year at least 250 returns of any 

type. The regulation, however, applies 

only to those corporations that report 

total assets at the end of the corporate 

taxable year of $10 million or more on 

Schedule L of their Form 1120. Section 

2301 of the TFA amended section 

6011(e) to authorize the Secretary to 

prescribe regulations to reduce the 

number of returns that a person may be 

required to file during a calendar year 

before the Secretary may impose an 

electronic-filing requirement. These 

proposed regulations would remove 

references to the 250-return threshold 

and reduce the electronic-filing 

threshold for corporate income tax 

returns to 10, for returns required to be 

filed during calendar years after 2021, in 

accordance with section 6011(e), as 

amended by the TFA. In addition, the 

Treasury Department and the IRS 

propose to remove the $10 million rule, 

making the regulation applicable to all 

corporations regardless of reportable 

assets. The $10 million rule was never 

required by the Code; rather, the 

Treasury Department and the IRS 

prescribed the rule in 2007 to help 

ensure that electronic-filing burdens 

and costs were appropriate, given the 

existing limits and accessibility to 

electronic-filing technology at that time. 

With the current prevalence and 

accessibility of electronic filing even for 

small businesses, as well as the benefits 

of quicker return processing, the $10- 

million rule is no longer needed. 

Accordingly, the proposed regulations 

would require that any corporation 

required to file a corporate income tax 

return under § 1.6012–2, regardless of 

the corporation’s reported total assets at 

the end of its taxable year, file that 

return electronically if the corporation 

is required to file at least 10 returns of 

any type during calendar years after 

2021. The proposed regulations would 

also update the example to reflect these 

changes. The proposed regulations do 

not change the existing rule in 

§ 301.6011–5 that all returns of any type 

are counted in determining whether a 

corporation is required to file its income 

tax return electronically. 

8. Proposed § 301.6037–2, Required Use 

of Electronic Form for Returns of 

Electing-Small Business Corporation 

Section 301.6037–2 prescribes 

standards for determining whether an S 

corporation must file its S corporation 

return electronically. Section 301.6037– 

2 requires S corporations to file their 

corporate income tax return 

electronically if the corporation is 

required to file during the calendar year 

at least 250 returns of any type, but the 

regulation applies only to those S 

corporations that report total assets at 

the end of the corporation’s taxable year 

that equal or exceed $10 million on 

Schedule L of Form 1120–S. 

Section 2301 of the TFA amended 

section 6011(e), authorizing the IRS to 

change the 250-return threshold to 10, 

for returns required to be filed during 

calendar years after 2021. These 

proposed regulations would remove 

references to the 250-return threshold 

and reduce the electronic-filing 

threshold for S corporations to 10 in 

accordance with section 6011(e), as 

amended by the TFA. In addition, the 

Treasury Department and the IRS 

propose to remove the $10 million rule 

for the same reasons that it is 

eliminating the rule for corporations. 

See section 7, Proposed § 301.6011–5, 

Rules for Filing Corporate Income Tax 

Returns Electronically. With the current 

prevalence and accessibility of e-filing, 

as well as the benefits of quicker 

processing of returns, the $10 million 

rule is no longer needed. Accordingly, 

the proposed regulations would require 

that any S corporation required to file 

an S-corporation return under § 1.6037– 

1, regardless of the corporation’s 

reported total assets at the end of its 

taxable year, file its income tax return 

electronically if the corporation is 

required to file at least 10 returns of any 

type during the calendar year. The 

proposed regulations would also update 

the example illustrating this rule to 

reflect these changes. 

9. Proposed §§ 1.6033–4 and 301.6033– 

4, Required Filing in Electronic Form for 

Returns by Organizations Required To 

File Returns Under Section 6033 

Section 1.6033–4 provides that the 

return of an organization that is required 

to be filed electronically under 

§ 301.6033–4 must be filed in 

accordance with IRS revenue 

procedures, publications, forms, or 

instructions, including those posted 

electronically. 

Section 301.6033–4 provides that an 

organization required to file a return 

under section 6033 on Form 990 must 

file its Form 990 electronically if the 

organization is required to file during 

the calendar year at least 250 returns of 

any type and if the organization has 

total assets as of the end of the taxable 

year of $10 million or more. It also 

provides that any organization 

(regardless of total assets) required to 

file Form 990–PF must file its Form 

990–PF electronically if it is required to 

file at least 250 returns of any type 

during the calendar year. 

In accordance with section 3101 of 

the TFA, these proposed regulations 

would amend §§ 1.6033–4 and 

301.6033–4 to replace the term 

‘‘magnetic media’’ with ‘‘in electronic 

form.’’ These proposed regulations 

would also amend § 301.6033–4 to 

remove any references to thresholds that 

establish a requirement to file 

electronically because the TFA now 

requires that any organization required 

to file a return under section 6033 must 

file such return in electronic form. 

Likewise, the proposed regulations 

would amend § 301.6033–4 by removing 

the following paragraphs: Paragraph 

(d)(1), which defines the term ‘‘magnetic 

media’’; paragraph (d)(3), which defines 

the term ‘‘determination of 250 returns’’; 

and paragraph (e), which illustrates by 

example how the 250 number is 

determined. In addition, the proposed 

regulations would remove § 301.6033– 

4(b), which provides that the 

Commissioner may grant waivers of the 

electronic-filing requirement. 

Section 3101 of the TFA does not 

provide for any waiver of or alternate 

method to the electronic-filing 

requirements for returns required to be 

filed under section 6033. Accordingly, 

these proposed regulations would 

amend § 301.6033–4 by removing 

paragraph (b) that provides for a waiver 

of the requirements. 

Finally, these proposed regulations 

would amend § 301.6033–4(d)(2) to 

include Form 990–EZ, ‘‘Short Form 

Return of Organization Exempt From 

Income Tax,’’ as a return required to be 

filed under section 6033, clarifying that 

section 3101 of the TFA mandates that 

all returns required to be filed under 

section 6033 must be filed in electronic 

form. 

10. Proposed § 53.6011–1(c) Deletion, 

Joint Filing of a Form 4720 Return 

Section 3101(a) of the TFA amended 

section 6033(n) to provide that any 

exempt organization required to file a 

return under section 6033 must file such 

return in electronic form. Section 

1.6033–2(a)(2) provides, under the 


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broad authority of section 6033(a)(1) 

(requiring every organization exempt 

from taxation under section 501(a) to 

file an annual return, stating specifically 

the items of gross income, receipts, and 

disbursements, and such other 

information for the purpose of carrying 

out the internal revenue laws as the 

Secretary may by forms or regulations 

prescribe), that every private foundation 

must file Form 990–PF, Return of 

Private Foundation, as its annual 

information return. In the case of a 

private foundation liable for tax under 

chapter 42, such information as is 

required by Form 4720 is to be 

furnished by the private foundation as 

part of its annual information return. 

See § 1.6033–2(a)(2)(ii)(J). The preamble 

to the final regulations adding § 1.6033– 

2(a)(2)(ii)(J) specifically noted that Form 

4720, when filed by a private 

foundation, is part of the annual 

information return required to be filed 

under section 6033 as well as a tax 

return required to be filed under section 

6011. Accordingly, Form 4720 filed by 

a private foundation as part of the Form 

990–PF is a return required to be filed 

under section 6033 and is thus required 

to be filed in electronic form as a return 

required under section 6033(n). For the 

electronic-filing requirement for persons 

not described under section 509(a) as a 

private foundation, see section 16 of this 

preamble, Proposed § 301.6011–12, 

Required Use of Electronic Form for 

Returns of Certain Excise Taxes Under 

Chapters 41 And 42 of the Internal 

Revenue Code. 

If Form 4720 is filed by a private 

foundation (or by a trust described in 

section 4947(a)(2)) with respect to a 

transaction to which other persons are 

required to file under § 53.6011–1(b) 

(persons liable for excise tax imposed by 

Chapters 41 and 42 of the Code), and if 

the other persons’ tax years are the same 

as the foundation’s or trust’s, § 53.6011– 

1(c) allows the private foundation and 

such other persons to file a joint Form 

4720, and, to the extent applicable, that 

form will be considered as the other 

persons’ return for purposes of 

complying with the filing requirement 

under § 53.6011–1(b). This current 

regulatory permission to jointly file 

Form 4720, however, is incompatible 

with the requirement under section 

6033(n) to file the return electronically. 

Accordingly, because the Form 4720 

cannot be filed jointly in electronic 

form, the proposed regulations would 

delete § 53.6011–1(c). Disqualified 

persons thus will no longer be able to 

meet their tax filing obligation under 

§ 53.6011–1(b) by the joint-filing 

process. 

Notice 2021–01, 2021–2 I.R.B. 315 

(January 11, 2021), announced the IRS’s 

intent to remove § 53.6011–1(c) because 

the amendments the TFA made to 

sections 6104 (that any annual return 

required to be filed electronically under 

section 6033(n) must be made available 

by the Secretary to the public as soon 

as practicable in a machine-readable 

format) and 6033 rendered unfeasible 

the ability for a private foundation and 

other persons to jointly file the same 

Form 4720 electronically. Notice 2021– 

01 was first released to the public on 

December 16, 2020, and substantially 

described the expected contents of the 

proposed amendments to § 53.6011–1, 

in accordance with section 

7805(b)(1)(C). Thus, the proposed 

changes to § 53.6011–1 described in this 

section are proposed to apply 

retroactively as of January 1, 2021, as 

allowed by section 7805(b)(1)(C). 

11. Proposed § 301.6057–3, Required 

Use of Electronic Form for Filing 

Requirements Relating to Deferred 

Vested Retirement Benefit 

Section 6057(a) requires the plan 

administrator (within the meaning of 

section 414(g)) of each plan, to which 

the vesting standards of section 203 of 

the Employee Retirement Income 

Security Act of 1974 (ERISA) apply for 

a plan year, to file, within the time 

prescribed by regulations, a registration 

statement with the Secretary. The 

registration statement must set forth the 

following information relating to the 

plan: (1) The name of the plan; (2) the 

name and address of the plan 

administrator; (3) the name and 

identifying information of plan 

participants who separated from service 

covered by the plan and are entitled to 

deferred vested retirement benefits; and 

(4) the nature, amount, and form of 

deferred vested retirement benefits to 

which the plan participants are entitled. 

The form used to satisfy the reporting 

requirements under section 6057 is 

Form 8955–SSA, Annual Registration 

Statement Identifying Separated 

Participants with Deferred Vested 

Benefits. 

Section 6057(b) provides that any 

plan administrator required to register 

under section 6057(a) must, within the 

time prescribed by regulations, also 

notify the Secretary of any change in the 

name of the plan or the name and 

address of the plan administrator, the 

termination of the plan, or the merger or 

consolidation of the plan with any other 

plan or its division into two or more 

plans. 

Section 301.6057–3 provides that a 

registration statement required to be 

filed under section 6057(a) or a 

notification required to be filed under 

section 6057(b) must be filed 

electronically if the filer is required by 

the Code or regulations to file at least 

250 returns during the calendar year 

that includes the first day of the plan 

year. For the reasons discussed in this 

preamble, and consistent with section 

6011(e), as amended by the TFA, these 

proposed regulations would remove 

references to the 250-return threshold 

and would reduce the electronic-filing 

threshold to 10 for registration 

statements required to be filed under 

section 6057(a) and notifications 

required under section 6057(b) with 

respect to an employee benefit plan for 

any plan year that begins after December 

31, 2021 (but only for filings with a 

filing deadline, not taking into account 

extensions, after July 31, 2022). See 

section 2.C., Amending the electronicfiling threshold. 

12. Proposed § 301.6058–2, Required 

Use of Electronic Form for Filing 

Requirements Relating to Information 

Required in Connection With Certain 

Plans of Deferred Compensation 

Section 6058(a) generally requires that 

every employer maintaining a pension, 

annuity, stock bonus, profit-sharing, or 

other funded plan of deferred 

compensation, or the plan administrator 

(within the meaning of section 414(g)) of 

the plan, file an annual return stating 

such information as the Secretary may 

by regulations prescribe with respect to 

the qualification, financial condition, 

and operations of the plan. The 

reporting requirement under section 

6058(a) is satisfied by filing a return in 

the Form 5500 series. The Form 5500, 

Annual Return/Report of Employee 

Benefit Plan, the Form 5500–SF, Short 

Form Annual Return/Report of Small 

Employee Benefit Plan, and Form 5500– 

EZ, Annual Return of A One-Participant 

(Owners/Partners and Their Spouses) 

Retirement Plan or A Foreign Plan, 

make up the Form 5500 series. 

Section 301.6058–2(a) provides that a 

return required to be filed under section 

6058 with respect to an employee 

benefit plan must be filed electronically 

if the filer is required by the Code or 

regulations to file at least 250 returns 

during the calendar year that includes 

the first day of the plan year. For the 

reasons discussed in this preamble, and 

in accordance with section 6011(e), as 

amended by the TFA, these proposed 

regulations would remove references to 

the 250-return threshold and reduce the 

electronic-filing threshold to 10 for 

returns required to be filed under 

section 6058 with respect to an 

employee benefit plan for any plan year 

that begins after December 31, 2021 (but 


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only for filings with a filing deadline, 

not taking into account extensions, after 

July 31, 2022). See section 2.C., 

Amending the electronic-filing 

threshold. In addition, these proposed 

regulations would provide a cross 

reference, under § 301.6058–2(d)(3), 

Calculating the number of returns, to 

new section 6011(e)(6) to alert taxpayers 

that information regarding each plan for 

which information is provided on a 

combined annual return to satisfy the 

requirements under section 6058 is 

treated as a separate return for purposes 

of determining the electronic-filing 

threshold. 

Under section 104 of ERISA, the plan 

administrator of a plan described in 

section 6058(a) of the Code that is also 

an employee pension benefit plan 

within the meaning of section 3(2) of 

ERISA must file an annual report on 

Form 5500, Annual Return/Report of 

Employee Benefit Plan, or Form 5500– 

SF, Short Form Annual Return/Report 

of Small Employee Benefit Plan (and all 

attachments to those forms, including 

Schedules SB and MB) electronically 

using the Department of Labor’s 

EFAST2 system, without regard to the 

number of returns the filer is required 

to file under the Code. The Department 

of Labor has advised the Treasury 

Department and the IRS that this 

proposed regulation does not affect the 

obligations of any person required to file 

an annual report electronically under 29 

CFR 2520.104a–2 and section 104 of 

ERISA. An electronic filing on Form 

5500 or Form 5500–SF also satisfies any 

obligation to file such forms using 

electronic form under section 6011 of 

the Code. An employer that maintains a 

one-participant or foreign plan (which is 

not subject to section 104 of ERISA) or 

the plan administrator of the plan may 

satisfy the annual return filing 

requirements under section 6058(a) of 

the Code by filing a Form 5500–EZ, 

Annual Return of A One-Participant 

(Owners/Partners and Their Spouses) 

Retirement Plan or A Foreign Plan, 

which is required to be filed 

electronically using the Department of 

Labor’s EFAST2 system only if the 

employer or plan administrator is 

otherwise required to file using 

electronic form under section 6011. 

13. Proposed § 301.6059–2, Required 

Use of Electronic Form for Filing 

Requirements Relating to Periodic 

Report of Actuary 

Section 6059(a) generally requires that 

a plan administrator (as defined in 

section 414(g)) of each defined benefit 

plan to which section 412 applies file 

the actuarial report described in section 

6059(b) for the first plan year for which 

section 412 applies to the plan and for 

each third plan year thereafter (or more 

frequently if the Secretary determines 

that more frequent reports are 

necessary). The reporting requirements 

under section 6059(a) and (b) are 

satisfied by filing Schedule SB (Form 

5500), Single Employer Defined Benefit 

Plan Actuarial Information and 

Schedule MB (Form 5500), 

Multiemployer Defined Benefit Plan and 

Certain Money Purchase Plan Actuarial 

Information. Section 301.6059–2 

provides that an actuarial report 

required to be filed under section 6059 

with respect to an employee benefit 

plan must be filed electronically if the 

filer is required by the Code or 

regulations to file at least 250 returns 

during the calendar year that includes 

the first day of the plan year. For the 

reasons discussed in this preamble, and 

in accordance with section 6011(e), as 

amended by the TFA, these proposed 

regulations would remove references to 

the 250-return threshold and would 

reduce the electronic-filing threshold to 

10, for actuarial reports required to be 

filed under section 6059 with respect to 

an employee benefit plan for any plan 

year that begins after December 31, 2021 

(but only for filings with a filing 

deadline, not taking into account 

extensions, after July 31, 2022). See 

section 2.C., Amending the electronicfiling threshold. The Department of 

Labor has advised the Treasury 

Department and the IRS that the 

electronic-filing threshold under section 

6011(e) does not affect the obligation of 

a plan administrator or plan sponsor to 

file electronically with the Department 

of Labor a Schedule SB or Schedule MB 

as an attachment to the Form 5500, as 

required by 29 CFR 2520.104a–2 and 

section 104 of ERISA. 

14. Proposed § 301.6011–10, Certain 

Organizations, Including Trusts, 

Required To File Unrelated Business 

Income Tax Returns in Electronic Form 

Section 3101(b)(2) of the TFA 

amended section 6011 to redesignate 

paragraph (h) as paragraph (i) and add 

new paragraph (h) that requires any 

organization required to file an annual 

return under section 6011 that relates to 

any tax imposed by section 511 to file 

such return in electronic form, effective 

for taxable years beginning after July 1, 

2019. Section 3101 of the TFA does not 

provide for any waiver of or alternative 

method to the electronic-filing 

requirement for returns required to be 

filed under section 6011(h). The 

proposed regulations would add a new 

regulation under section 6011(h), 

§ 301.6011–10, in accordance with the 

TFA, to require any organization 

described in section 511(a)(2) subject to 

the tax under section 511(a)(1) or any 

trust described in section 511(b)(2) 

subject to the tax under section 

511(b)(1) on their respective unrelated 

business taxable income to file their 

unrelated business income tax returns 

electronically. 

15. Proposed § 301.6011–11, Required 

Use of Electronic Form for Returns for 

Certain Tax-Advantaged Bonds 

Under former sections 54AA and 

6431(f) of the Code, issuers of qualified 

taxable bonds that provide a refundable 

federal tax credit payable directly to the 

issuer of the bond, such as buildAmerica bonds, recovery zone economic 

development bonds, new clean 

renewable energy bonds, qualified 

energy conservation bonds, qualified 

zone academy bonds, and qualified 

school construction bonds, can elect to 

receive a direct payment from the 

federal government based upon a 

percentage of the interest payments on 

these bonds. Section 3.1 of Notice 2009– 

26, 2009–16 I.R.B. 833, 836 (April 20, 

2009), and section 3 of Notice 2010–35, 

2010–19 I.R.B. 660, 662 (May 10, 2010), 

provide that issuers of qualified bonds 

must submit a Form 8038–CP, Return 

for Credit Payments to Issuers of 

Qualified Bonds, to request payment of 

the amount of the credit within a 

prescribed time before or after each 

applicable interest payment date, 

depending on whether the bonds are 

fixed rate or variable rate. During 2013 

to 2018, the IRS processed an average of 

$5 billion in direct payment requests; 

amounts paid on each return varied 

from less than $1,000 to more than $65 

million. During 2019, state and local 

governments filed approximately 10,000 

Forms 8038–CP in paper form. The IRS 

expects that it will continue to receive 

Forms 8038–CP from these issuers 

during the entire term of the bonds, 

which may be more than 20 years. 

The proposed regulations would 

require filers who are required to file at 

least 10 returns of any type during the 

calendar year to file their Forms 8038– 

CP electronically, as directed by the 

form’s instructions. This requirement 

would increase the timeliness and 

accuracy of processing these forms and 

promote IT modernization efforts. 

Proposed § 301.6011–11 would also 

provide that the Commissioner may 

grant individual waivers of the e-filing 

requirement of this section in cases of 

undue hardship. The Treasury 

Department and the IRS anticipate 

issuing guidance that will set forth 

procedures whereby a taxpayer may 

request a hardship waiver for filing 

Form 8038–CP electronically. 


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16. Proposed § 301.6011–12, Required 

Use of Electronic Form for Returns of 

Certain Excise Taxes Under Chapters 41 

and 42 of the Internal Revenue Code 

Section 2301 of the TFA amended 

section 6011(e), changing the 250-return 

threshold to a 10-return threshold for 

returns required to be filed in calendar 

years after 2021. The proposed 

regulations would add a new regulation 

under section 6011(e), § 301.6011–12, 

that would require the electronic filing 

of Form 4720, Return of Certain Excise 

Taxes Under Chapters 41 and 42 of the 

Internal Revenue Code. The proposed 

regulations would require a person to 

file the Form 4720 electronically if that 

person is required to file at least 10 

returns of any type during the calendar 

year. Proposed § 301.6011–12 would 

also provide that the Commissioner may 

grant individual waivers of the 

requirements of this section in cases of 

undue hardship. The Treasury 

Department and the IRS anticipate 

issuing guidance that will set forth 

procedures whereby a taxpayer may 

request a hardship waiver for filing 

Form 4720 electronically. The proposed 

regulations relating to the requirements 

for determining whether a person must 

file its Form 4720 electronically would 

not limit the application of any other 

statute affecting Form 4720, such as 

section 6033(n), which requires a Form 

4720 filed by organizations recognized 

as tax exempt under section 501(c)(3) 

and classified as private foundations 

under section 509(a) to be filed 

electronically, as discussed under 

section 10, Proposed § 53.6011–1(c) 

Deletion, Joint Filing of a Form 4720 

Return. 

17. Proposed § 301.6011–13, Required 

Use of Electronic Form for Split-Interest 

Trust Returns 

Section 2301 of the TFA amended 

section 6011(e), changing the 250-return 

threshold to a 10-return threshold for 

returns required to be filed in calendar 

years after 2021. The proposed 

regulations would add a new regulation 

under section 6011(e), § 301.6011–13, 

that would require the filing of Form 

5227, Split-Interest Trust Information 

Return, electronically. Forms 5227 are 

filed by split-interest trusts to report the 

trust’s financial activities, including 

distributions to the beneficiaries. The 

proposed regulations would require a 

trust to file the Form 5227 electronically 

if the trust is required to file at least 10 

returns of any type during the calendar 

year. Proposed § 301.6011–13 would 

also provide that the Commissioner may 

grant individual waivers of the 

requirements of this section in cases of 

undue hardship. The Treasury 

Department and the IRS anticipate 

issuing guidance that will set forth 

procedures whereby a taxpayer may 

request a hardship waiver for filing 

Form 5227 electronically. 

18. Proposed § 301.6011–14, Required 

Use of Electronic Form or Other 

Machine-Readable Form for Material 

Advisor Disclosure Statements 

The proposed regulations would add 

a new regulation under section 6011(e), 

§ 301.6011–14, that would require the 

filing of Form 8918, Material Advisor 

Disclosure Statement, electronically or 

in other machine-readable form, in 

accordance with revenue procedures, 

publications, forms, instructions, or 

other guidance, including postings on 

the IRS.gov website. Section 6111 

requires each material advisor with 

respect to any reportable transaction to 

make a return setting forth certain 

information with respect to the 

reportable transaction. Section 

301.6111–3(d) clarifies that the return 

required to be filed under section 

6111(a) is the Form 8918. Form 8918 is 

currently filed on paper and must be 

mailed to the Office of Tax Shelter 

Analysis in Ogden, Utah. The proposed 

regulations would require a material 

advisor to file the Form 8918 

electronically or in other machinereadable form if the material advisor is 

required to file at least 10 returns of any 

type during the calendar year, in 

accordance with section 6011(e), as 

amended by section 2301 of the TFA. 

This requirement would increase the 

timeliness and accuracy of processing 

the data on Form 8918, reduce postage 

costs, and promote IT modernization 

efforts. Proposed § 301.6011–14 would 

also provide that the Commissioner may 

grant individual waivers of the 

requirements of this section in cases of 

undue hardship. The Treasury 

Department and the IRS anticipate 

issuing guidance that will set forth 

procedures whereby a taxpayer may 

request a hardship waiver from filing 

Form 8918 electronically. 

19. Proposed § 301.6011–15, Required 

Use of Electronic Form for Withholding 

Tax Returns 

The proposed regulations would add 

a new regulation under section 6011(e), 

§ 301.6011–15, that would require the 

filing of Form 1042, Annual 

Withholding Tax Return for U.S. Source 

Income of Foreign Persons, 

electronically in accordance with 

revenue procedures, publications, 

forms, instructions, or other guidance, 

including postings on the IRS.gov 

website. Sections 1441 and 1442 require 

withholding agents to withhold tax from 

payments made to foreign persons with 

respect to certain U.S. source income 

and to report those payments and the 

tax withheld for each recipient. Section 

1.1461–1(c) specifies that the reporting 

be on Form 1042–S, Foreign Persons’ 

U.S. Source Income Subject to 

Withholding. In addition, § 1.1461–1(b) 

requires withholding agents to make an 

annual income tax return on Form 1042 

that reports the aggregate income paid 

and taxes withheld for the preceding 

calendar year. 

The IRS verifies the amount of 

withholding reported on Form 1042 and 

deposited with the IRS against amounts 

reported as withheld on Forms 1042–S. 

Form 1042–S is already required to be 

electronically filed to the extent 

provided under § 301.6011–2 for a 

withholding agent that is not a financial 

institution. But the Form 1042 is not 

required to be electronically filed. To 

increase the timeliness and accuracy of 

processing refunds and credits claimed 

by foreign persons that have amounts 

withheld and reported on Form 1042–S, 

proposed § 301.6011–15 would require 

Form 1042 filers—except for 

individuals, estates, or trusts—to file 

Form 1042 electronically if they are 

required to file 10 or more returns of 

any type during the calendar year, in 

accordance with section 6011(e), as 

amended by section 2301 of the TFA. 

Proposed § 301.6011–15 would also 

require partnerships with more than 100 

partners to file their Forms 1042 

electronically, regardless of the number 

of returns the partnership is required to 

file during the calendar year. Proposed 

§ 301.6011–15 would also provide that 

the Commissioner may grant individual 

waivers of the requirements of this 

section in cases of undue hardship. 

20. Proposed § 301.6012–2, Required 

Use of Electronic Form for Income Tax 

Returns of Certain Political 

Organizations 

Section 2301 of the TFA amended 

section 6011(e), changing the 250-return 

threshold to a 10-return threshold for 

returns required to be filed in calendar 

years after 2021. The proposed 

regulations would add a new regulation 

under sections 6011(e) and 6012(a), 

§ 301.6012–2, to require the filing of 

Form 1120–POL, U.S. Income Tax 

Return for Certain Political 

Organizations electronically. The Form 

1120–POL is filed by political 

organizations, described in section 527 

of the Code, to report income not 

specifically excluded from tax under 

section 527 and by exempt 

organizations subject to tax under 

section 527(f)(1) of the Code. The 


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proposed regulations would require an 

organization to file the Form 1120–POL 

electronically if the organization is 

required to file at least 10 returns of any 

type during the calendar year. Proposed 

§ 301.6012–2 would also provide that 

the Commissioner may grant individual 

waivers of the requirements of this 

section in cases of undue hardship. The 

Treasury Department and the IRS 

anticipate issuing guidance that will set 

forth procedures whereby a taxpayer 

may request a hardship waiver for filing 

Form 1120–POL electronically. 

21. Proposed § 54.6011–3, Required Use 

of Electronic Form for the Filing 

Requirements for the Return for Certain 

Excise Taxes Related to Employee 

Benefit Plans 

The proposed regulations would add 

a new regulation under section 6011(e), 

§ 54.6011–3, to require the filing of 

Forms 5330, Return of Excise Taxes 

Related to Employee Benefit Plans, 

electronically. Section 2301 of the TFA 

amended section 6011(e), changing the 

250-return threshold to a 10-return 

threshold for returns required to be filed 

during calendar years after 2021. The 

proposed regulations would require a 

filer to file the Form 5330 electronically 

if the filer is required to file at least 10 

returns of any type during the calendar 

year. Proposed § 54.6011–3 would also 

provide that the Commissioner may 

grant individual waivers of the 

requirements of this section in cases of 

undue hardship. The Treasury 

Department and the IRS anticipate 

issuing guidance that will set forth 

procedures whereby a taxpayer may 

request a hardship waiver for filing 

Form 5330 electronically. 

22. Proposed § 1.1461–1, Payment and 

Returns of Tax Withheld 

Section 1.1461–1 prescribes 

requirements for withholding agents to 

file information returns with respect to 

U.S. source income of foreign persons. 

Section 1.1461–1(c)(5) provides that a 

withholding agent that makes 250 or 

more Form 1042–S information returns 

for a taxable year must file those forms 

electronically as required under 

§ 301.6011–2(b). The proposed 

regulations would amend § 1.1461–1 to 

remove paragraph (c)(5) because the 

electronic-filing requirement for Form 

1042–S is contained in § 301.6011–2(b) 

and the 250-return threshold would no 

longer apply if the proposed 

amendments to § 301.6011–2 are 

finalized in a Treasury decision. 

23. Proposed § 1.1474–1, Liability for 

Withheld Tax and Withholding Agent 

Reporting 

Section 1.1474–1 provides rules for 

withholding agents making payments 

under chapter 4 of the Code. The first 

sentence in § 1.1474–1(e) provides that 

withholding agents that are not financial 

institutions and that are required to file 

250 or more Forms 1042–S for a taxable 

year must file those forms 

electronically, referencing § 301.6011– 

2(b). The proposed regulations would 

amend § 1.1474–1 to remove the first 

sentence in § 1.1474–1(e) because the 

electronic-filing requirement for Form 

1042–S is contained in § 301.6011–2(b) 

and the 250-return threshold would no 

longer apply if the proposed 

amendments to § 301.6011–2 are 

finalized in a Treasury decision. 

24. Proposed § 301.1474–1, Required 

Use of Electronic Form for Financial 

Institutions Filing Form 1042, Form 

1042–S, or Form 8966 

These proposed regulations would 

amend § 301.1474–1 to add a 

requirement that a financial institution 

must file its Form 1042 electronically, 

without regard to the number of returns 

required to be filed during the calendar 

year, in accordance with section 

6011(e)(4). The existing provision in 

§ 301.1474–1(b), which provides that 

the Commissioner may grant individual 

waivers of the requirements of 

§ 301.1474–1 in cases of undue 

hardship, would also apply to the 

proposed electronic-filing requirement 

relating to Form 1042. 

25. Proposed § 1.6050M–1, Information 

Returns Relating to Persons Receiving 

Contracts From Certain Federal 

Executive Agencies 

Section 1.6050M–1 requires federal 

executive agencies who enter into 

certain contracts, as defined under 

§ 1.6050M–1(b)(2), to file information 

returns with respect to those contracts. 

Under § 1.6050M–1(d), the information 

returns must be filed on a quarterly 

basis; in addition, if the federal 

executive agency, on any October 1, 

expects to enter into 250 or more 

contracts during the one-year period 

beginning on October 1, it must file the 

information returns electronically. 

Section 2301 of the TFA amended 

section 6011(e), authorizing the IRS to 

change the 250-return threshold to 10, 

for returns required to be filed during 

calendar years after 2021. For the 

reasons discussed in this preamble, and 

consistent with section 6011(e), as 

amended by the TFA, these proposed 

regulations would remove references to 

the 250-return threshold under 

§ 1.6050M–1 and would reduce the 

electronic-filing threshold from 250 to 

100, for information returns required to 

be filed during calendar year 2022, and 

from 100 to 10, for information returns 

required to be filed during calendar 

years after 2022. 

Proposed § 1.6050M–1 would also 

provide that the Commissioner may 

grant individual waivers of the 

requirements of this section in cases of 

undue hardship. 

26. Proposed § 1.6045–4, Information 

Returns Relating to Persons Receiving 

Contracts From Certain Federal 

Executive Agencies 

Section 1.6045–4 requires a real estate 

reporting person to file information 

returns with respect to real-estate 

transactions. Section 1.6045–4(k) 

provides rules for filing these returns 

electronically. The form used to report 

these transactions is a form covered 

under § 301.6011–2(b)(1). Section 

301.6011–2 provides the rules for 

electronically filing the forms listed in 

§ 301.6011–2(b)(1). These proposed 

regulations would thus remove 

paragraph (k) from § 1.6045–4 because 

the electronic-filing requirement is 

contained in § 301.6011–2. 

27. Withdrawal of May 2018 Proposed 

Regulations 

In light of the TFA, the Treasury 

Department and the IRS withdraw the 

May 2018 proposed regulations under 

section 6011(e) because those proposed 

regulations interpret a provision of the 

Code that has been amended. The 

Treasury Department and the IRS have 

determined that the amendments made 

to section 6011(e) by the TFA require 

guidance to be issued by regulations. 

Withdrawing the proposed regulations 

and reissuing new proposed regulations 

ensure that all persons affected by the 

proposed regulations will have a 

meaningful opportunity to publicly 

comment. 

Special Analyses 

These regulations are not subject to 

review under section 6(b) of Executive 

Order 12866 pursuant to the 

Memorandum of Agreement (April 11, 

2018) between the Treasury Department 

and the Office of Management and 

Budget regarding review of tax 

regulations. 

Pursuant to the Regulatory Flexibility 

Act (5 U.S.C. chapter 6), it is hereby 

certified that this proposed rule, if 

finalized, will not have a significant 

economic impact on a substantial 

number of small entities. Although 

these rules may affect a substantial 


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number of small entities, for the reasons 

discussed in the following paragraphs, 

the economic impact is not significant. 

Under section 6011(e) of the Code and 

§§ 1.6050M–1, 301.6011–2, 301.6011–3, 

301.6011–5, 301.6037–2, 301.6057–3, 

301.6058–2, and 301.6059–2, filers are 

already required to file returns and 

statements electronically if, during a 

calendar year, they are required to file 

250 or more returns. The eight proposed 

rules—§§ 1.6050M–1, 301.6011–2, 

301.6011–3, 301.6011–5, 301.6037–2, 

301.6057–3, 301.6058–2, and 301.6059– 

2—would lower the 250-return 

threshold as authorized by section 

6011(e), as amended by section 2301 of 

the TFA. A filer may request that the 

IRS waive the electronic-filing 

requirement if the filer’s cost to comply 

with the rule would cause a financial 

hardship. The IRS routinely grants 

meritorious hardship waiver requests. 

Accordingly, the economic burden on 

the limited number of small entities that 

are not currently filing electronically 

will be slight; and small entities that 

would experience a hardship because of 

these seven proposed rules may seek a 

waiver. 

Under section 6050I of the Code and 

§§ 1.6050I–1 and 1.6050I–2, filers are 

required to file Forms 8300 if, in the 

course of their trade or business, they 

receive more than $10,000 in cash in 

one transaction or in two or more 

related transactions. The proposed rule 

under § 301.6011–2(b)(3) would require 

filers of Forms 8300 to file those forms 

electronically if such filers are also 

required to file returns electronically 

under paragraphs (b)(1) and (b)(2) of 

§ 301.6011–2. The Treasury Department 

and the IRS expect filers of Form 8300 

to use FinCEN’s BSA E-Filing System, 

which is free, requiring only an internet 

connection. The economic impact on 

small entities should thus not be 

significant. Nonetheless, small entities 

that would experience a hardship 

because of this proposed rule may seek 

a hardship waiver. 

Under section 6011(e)(4) of the Code 

and § 301.1474–1, financial institutions 

defined in section 1471(d)(5) of the 

Code already are required to 

electronically file Forms 1042–S. The 

proposed rule under § 301.1474–1(a) 

would extend this filing requirement to 

Forms 1042 filed by the same financial 

institutions. The economic impact on 

small entities should thus not be 

significant. Nonetheless, small entities 

that would experience a hardship 

because of this proposed rule may seek 

a hardship waiver. 

Under section 6011(h) of the Code, as 

amended by section 3101 of the TFA, 

organizations required to file annual 

returns relating to any tax imposed by 

section 511 must file those returns in 

electronic form. The proposed 

regulation § 301.6011–10 implements 

this statutory requirement. The 

economic impact of the proposed 

regulation should thus be insignificant. 

Under section 6033(n), as amended by 

section 3101 of the TFA, organizations 

required to file returns under section 

6033 must file those returns in 

electronic form. The proposed 

regulations under §§ 1.6033–4, 53.6011– 

1, and 301.6033–4 implement this 

statutory requirement. The economic 

impact of these proposed regulations 

should thus be insignificant. 

The seven proposed regulations under 

§§ 54.6011–3, 301.6011–11, 301.6011– 

12, 301.6011–13, 301.6011–14, 

301.6011–15, and 301.6012–2 would 

require electronic filing for certain 

returns not currently required to be filed 

electronically. Because electronic filing 

has become more common, accessible, 

and economical, the economic impact of 

these proposed rules on small entities 

should be insignificant. But if the cost 

to comply with these electronic-filing 

requirements would cause a financial 

hardship, an entity may request a 

waiver. The IRS routinely grants 

meritorious hardship waiver requests. 

Accordingly, the burden on small 

entities affected by these rules will be 

slight. 

Accordingly, it is hereby certified that 

these proposed regulations will not have 

a significant economic impact on a 

substantial number of small entities 

within the meaning of section 601(6) of 

the RFA. 

Section 202 of the Unfunded 

Mandates Reform Act of 1995 requires 

that agencies assess anticipated costs 

and benefits and take certain other 

actions before issuing a final rule that 

includes any federal mandate that may 

result in expenditures in any one year 

by a state, local, or tribal government, in 

the aggregate, or by the private sector, of 

$100 million in 1995 dollars, updated 

annually for inflation. This regulation 

does not include any federal mandate 

that may result in expenditures by state, 

local, or tribal governments, or by the 

private sector in excess of that 

threshold. 

Executive Order 13132 (titled 

Federalism) prohibits an agency from 

publishing any rule that has federalism 

implications if the rule either imposes 

substantial, direct compliance costs on 

state and local governments, and is not 

required by statute, or preempts state 

law, unless the agency meets the 

consultation and funding requirements 

of section 6 of the Executive Order. This 

rule does not have federalism 

implications and does not impose 

substantial direct compliance costs on 

state and local governments or preempt 

state law, within the meaning of the 

Executive Order. 

Pursuant to section 7805(f) of the 

Code, this proposed regulation has been 

submitted to the Chief Counsel for the 

Office of Advocacy of the Small 

Business Administration for comment 

on its impact on small business. 

Comments and Public Hearing 

Before these proposed regulations are 

adopted as final regulations, 

consideration will be given to comments 

that are submitted timely to the IRS as 

prescribed in this preamble under the 

ADDRESSES section. The Treasury 

Department and the IRS request 

comments on all aspects of the proposed 

regulations. Any comments submitted 

will be available at www.regulations.gov 

or upon request. 

The public hearing is being held by 

teleconference on September 22, 2021 at 

10 a.m. EST. Requests to speak and 

outlines of topics to be discussed at the 

public hearing must be received by 

September 21, 2021. If no outlines are 

received by September 21, 2021, the 

public hearing will be cancelled. 

Requests to attend the public hearing 

must be received by 5:00 p.m. EST on 

September 20, 2021. The telephonic 

hearing will be made accessible to 

people with disabilities. Requests for 

special assistance during the telephonic 

hearing must be received by September 

20, 2021. 

Drafting Information 

The principal author of these 

proposed regulations is Casey R. Conrad 

of the Office of the Associate Chief 

Counsel (Procedure and 

Administration). Other personnel from 

the Treasury Department and the IRS 

participated in the development of the 

regulations. 

Statement of Availability of IRS 

Documents 

IRS revenue procedures, notices, and 

other guidance cited in this document 

are published in the Internal Revenue 

Bulletin (or Cumulative Bulletin) and 

are available from the Superintendent of 

Documents, U.S. Government 

Publishing Office, Washington, DC 

20402, or by visiting the IRS website at 

http://www.irs.gov. 

Withdrawal of Proposed Regulations 

Under the authority of 26 U.S.C. 7805, 

§ 301.6011–2 and § 301.6721–1 of the 

notice of proposed rulemaking (REG– 

102951–16) that was published in the 


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Federal Register on Thursday, May 31, 

2018 (83 FR 24948) is withdrawn. 

List of Subjects 

26 CFR Part 1 

Income taxes, Reporting and 

recordkeeping requirements. 

26 CFR Part 53 

Excise taxes, Foundations, 

Investments, Lobbying, Reporting and 

recordkeeping requirements. 

26 CFR Part 54 

Excise taxes, Pensions, Reporting and 

recordkeeping requirements. 

26 CFR Part 301 

Employment taxes, Estate taxes, 

Excise taxes, Gift taxes, Income taxes, 

Penalties, Reporting and recordkeeping 

requirements. 

Proposed Amendments to the 

Regulations 

Accordingly, 26 CFR parts 1, 53, 54 

and 301 are proposed to be amended as 

follows: 

PART 1—INCOME TAXES 

■ Paragraph 1. The authority citation 

for part 1 is amended by adding the 

following entries in numerical order: 

Authority: 26 U.S.C. 7805 * * * 

Section 1.6033–4 also issued under 26 

U.S.C. 6033. 

Section 1.6037–2 also issued under 26 

U.S.C. 6037. 

* * * * * 

■ Par. 2. Section 1.1461–1 is amended 

by removing paragraph (c)(5) and 

revising paragraph (i) to read as follows: 

§ 1.1461–1. Payment and returns of tax 

withheld. 

* * * * * 

(i) Applicability date. Except as 

provided in paragraph (c)(2)(iii) of this 

section, this section applies to returns 

required for payments made on or after 

[the date of publication of the Treasury 

decision adopting these rules as final 

regulations in the Federal Register]. 

(For payments made before [Date of 

publication of the Treasury decision 

adopting these rules as final regulations 

in the Federal Register] and on or after 

January 1, 2022, see this section as in 

effect and contained in 26 CFR part 1, 

as revised April 1, 2021. For payments 

made before January 1, 2022, see this 

section as in effect and contained in 26 

CFR part 1, as revised April 1, 2020.) 

■ Par. 3. Section 1.1471–0 is amended 

by revising the entries in the table of 

contents for § 1.1474–1(e) and (j) and 

§ 301.1474–1(d)(1) and (e) to read as 

follows: 

§ 1.1471–0 Outline of regulation provisions 

for sections 1471 through 1474. 

* * * * * 

§ 1.1474–1 Liability for withheld tax 

and withholding agent reporting. 

* * * * * 

(e) Reporting in electronic form. 

* * * * * 

(j) Applicability date. 

* * * * * 

§ 301.1474–1 Required use of 

electronic form for financial institutions 

filing Form 1042, Form 1042–S, or Form 

8966. 

* * * * * 

(d) * * * 

(1) Magnetic media or electronic form. 

* * * * * 

(e) Applicability date. 

■ Par. 4. Section 1.1474–1 is amended 

by revising paragraphs (e) and (j) to read 

as follows: 

§ 1.1474–1 Liability for withheld tax and 

withholding agent reporting. 

* * * * * 

(e) Reporting in electronic form. See 

§ 301.6011–2(b) of this chapter for the 

requirements of a withholding agent 

that is not a financial institution with 

respect to the filing of Forms 1042–S in 

electronic form. See § 301.1474–1(a) of 

this chapter for the requirements 

applicable to a withholding agent that is 

a financial institution with respect to 

the filing of Forms 1042–S in electronic 

form. 

* * * * * 

(j) Applicability date. This section 

applies to returns required for payments 

made on or after [Date of publication of 

the Treasury decision adopting these 

rules as final regulations in the Federal 

Register]. (For the rules that apply 

before [the date of publication of the 

Treasury decision adopting these rules 

as final regulations in the Federal 

Register] and on or after January 6, 

2017, see this section as in effect and 

contained in 26 CFR part 1, as revised 

April 1, 2021.) 

■ Par. 5. Section 1.6033–4 is revised to 

read as follows: 

§ 1.6033–4 Required filing in electronic 

form for returns by organizations required 

to file returns under section 6033. 

(a) In general. The return of an 

organization that is required to be filed 

in electronic form under § 301.6033–4 of 

this chapter must be filed in accordance 

with revenue procedures, publications, 

forms, instructions, or other guidance. 

(b) Applicability date. The rules of 

this section apply for returns required to 

be filed for taxable years ending on or 

after [Date of publication of the Treasury 

decision adopting these rules as final 

regulations in the Federal Register]. 

■ Par. 6. Section 1.6037–2 is revised to 

read as follows: 

§ 1.6037–2 Required use of electronic form 

for income tax returns of electing small 

business corporations. 

(a) In general. The return of an 

electing small business corporation that 

is required to be filed electronically 

under § 301.6037–2 of this chapter must 

be filed in accordance with Internal 

Revenue Service revenue procedures, 

publications, forms, or instructions, 

including those posted electronically. 

(b) Applicability date. The rules of 

this section apply for returns required to 

be filed for taxable years ending on or 

after [Date of publication of the Treasury 

decision adopting these rules as final 

regulations in the Federal Register]. 

■ Par. 7. Section 1.6045–2 is amended 

by revising paragraphs (g)(2) and (i) to 

read as follows: 

§ 1.6045–2 Furnishing statement required 

with respect to certain substitute payments. 

* * * * * 

(g) * * * 

(2) Reporting in electronic form. For 

information returns filed after December 

31, 1996, see § 301.6011–2 of this 

chapter for rules relating to filing 

information returns in electronic form 

and for rules relating to waivers granted 

for undue hardship. A broker or barter 

exchange that fails to file a Form 1099 

electronically, when required, may be 

subject to a penalty under section 6721 

for each such failure. See paragraph 

(g)(4) of this section. 

* * * * * 

(i) Applicability date. This section 

applies to substitute payments received 

by a broker after December 31, 1984. 

The amendments to paragraph (c) of this 

section apply to payee statements due 

after December 31, 2014. For payee 

statements due before January 1, 2015, 

§ 1.6045–2(c) (as contained in 26 CFR 

part 1, revised April 2013) shall apply. 

The amendments to paragraph (g)(2) of 

this section apply to information returns 

required to be filed during calendar 

years beginning after [Date of 

publication of the Treasury decision 

adopting these rules as final regulations 

in the Federal Register]. 

■ Par. 8. Section 1.6045–4 is amended 

by removing and reserving paragraph (k) 

and revising paragraph (s) to read as 

follows: 

§ 1.6045–4 Information reporting on real 

estate transactions with dates of closing on 

or after January 1, 1991. 

* * * * * 

(s) Applicability date. This section 

applies for real estate transactions with 

dates of closing (as determined under 

paragraph (h)(2)(ii) of this section) that 


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occur on or after January 1, 1991. The 

amendments to paragraphs (b)(2)(i)(E), 

(b)(2)(ii) and (c)(2)(i) of this section 

apply to sales or exchanges of standing 

timber for lump-sum payments 

completed after May 28, 2009. The 

amendments to paragraph (m)(1) of this 

section apply to payee statements due 

after December 31, 2014. For payee 

statements due before January 1, 2015, 

§ 1.6045–4(m)(1) (as contained in 26 

CFR part 1, revised April 2013) shall 

apply. The removal of paragraph (k) of 

this section applies for information 

returns required to be filed during 

calendar years beginning after [Date of 

publication of the Treasury decision 

adopting these rules as final regulations 

in the Federal Register]. 

■ Par. 9. Section 1.6050I–0 is amended 

by revising the entry in the table of 

contents for § 1.6050I–1(d)(2)(ii) as 

follows: 

§ 1.6050I–0 Table of contents. 

* * * * * 

(d) * * * 

(2) * * * 

(ii) Casinos exempt under 31 CFR 

1010.970(c). 

* * * * * 

■ Par. 10. Section 1.6050I–1 is amended 

by: 

■ 1. Revising paragraphs (a)(3)(ii), 

(c)(1)(iv), (d)(2)(i), (d)(2)(ii): 

■ 2. In paragraph (d)(2)(iv), designating 

the example as paragraph (d)(2)(iv)(A); 

■ 3. Revising newly designated 

paragraph (d)(2)(iv)(A) and adding 

paragraph (d)(2)(iv)(B); 

■ 4. Revising paragraphs (e)(1) and 

(e)(3)(i); and 

■ 5. Adding paragraph (h). 

The revisions and additions read as 

follows: 

§ 1.6050I–1 Returns relating to cash in 

excess of $10,000 received in a trade or 

business. 

(a) * * * 

(3) * * * 

(ii) Exception. An agent who receives 

cash from a principal and uses all of the 

cash within 15 days in a cash 

transaction (second cash transaction) 

which is reportable under section 6050I 

or 5312 of title 31 of the United States 

Code and the regulations thereunder (31 

CFR Chapter X), and who discloses the 

name, address, and taxpayer 

identification number of the principal to 

the recipient in the second cash 

transaction need not report the initial 

receipt of cash under this section. 

* * * * * 

(c) * * * 

(1) * * * 

(iv) Exception for certain loans. A 

cashier’s check, bank draft, traveler’s 

check, or money order received in a 

designated reporting transaction is not 

treated as cash pursuant to paragraph 

(c)(1)(ii)(B)(1) of this section if the 

instrument constitutes the proceeds of a 

loan from a bank (as that term is defined 

in 31 CFR Chapter X). 

* * * * * 

(d) * * * 

(2) * * * (i) In general. If a casino 

receives cash in excess of $10,000 and 

is required to report the receipt of such 

cash directly to the Treasury 

Department under 31 CFR 1021.310 or 

1010.360 and is subject to the 

recordkeeping requirements of 31 CFR 

1021.400, then the casino is not 

required to make a return with respect 

to the receipt of such cash under section 

6050I and these regulations. 

(ii) Casinos exempt under 31 CFR 

1010.970(c). Under the authority of 

section 6050I(c)(1)(A), the Secretary 

may exempt from the reporting 

requirements of section 6050I casinos 

with gross annual gaming revenue in 

excess of $1,000,000 that are exempt 

under 31 CFR 1010.970(c) from 

reporting certain cash transactions to 

the Treasury Department under 31 CFR 

1021.310 or 1010.360. The 

determination whether a casino which 

is granted an exemption under 31 CFR 

1010.970(c) will be required to report 

under section 6050I will be made on a 

case by case basis, concurrently with the 

granting of such an exemption. 

* * * * * 

(iv) * * * 

(A) Example. A and B are casinos 

having gross annual gaming revenue in 

excess of $1,000,000. C is a casino with 

gross annual gaming revenue of less 

than $1,000,000. Casino A receives 

$15,000 in cash from a customer with 

respect to a gaming transaction which 

the casino reports to the Treasury 

Department under 31 CFR 1021.310 and 

1010.360. Casino B’s hotel division 

receives $15,000 in cash from a 

customer in payment for 

accommodations provided to that 

customer at Casino B’s hotel. Casino C 

receives $15,000 in cash from a 

customer with respect to a gaming 

transaction. Casino A is not required to 

report the transaction under section 

6050I or these regulations because the 

exception for certain casinos provided 

in paragraph (d)(2)(i) of this section 

(casino exception) applies. Casino B’s 

hotel division is required to report 

under section 6050I and these 

regulations because the casino 

exception does not apply to the receipt 

of cash by a nongaming business 

division. Casino C is required to report 

under section 6050I and these 

regulations because the casino 

exception does not apply to casinos 

having gross annual gaming revenue of 

$1,000,000 or less which do not have to 

report to the Treasury Department under 

31 CFR 1021.310 and 1010.360. 

(B) [Reserved] 

* * * * * 

(e) * * * (1) Time of reporting. The 

reports required by this section must be 

filed in accordance with the Form 8300 

instructions and related publications by 

the 15th day after the date the cash is 

received. However, in the case of 

multiple payments relating to a single 

transaction (or two or more related 

transactions), see paragraph (b) of this 

section. 

* * * * * 

(3) * * * (i) Where to file. A person 

making a return of information under 

this section must file Form 8300 in 

accordance with the form instructions 

and related publications. 

* * * * * 

(h) Applicability date. The rules of 

this section apply for returns required to 

be filed during calendar years beginning 

after [Date of publication of the Treasury 

decision adopting these rules as final 

regulations in the Federal Register]. 

■ Par. 11. Section 1.6050I–2 is amended 

by revising paragraphs (c)(1)(i), (c)(3)(i), 

and (f) to read as follows: 

§ 1.6050I–2 Returns relating to cash in 

excess of $10,000 received as bail by court 

clerks. 

* * * * * 

(c) * * * 

(1) * * * (i) In general. The 

information return required by this 

section must be filed in accordance with 

the Form 8300 instructions and related 

publications by the 15th day after the 

date the cash bail is received. 

* * * * * 

(3) * * * (i) Where to file. Returns 

required by this section must be filed in 

accordance with the Form 8300 

instructions and related publications. A 

copy of the information return required 

to be filed under this section must be 

retained for five years from the date of 

filing. 

* * * * * 

(f) Applicability date. The rules of this 

section apply for returns required to be 

filed during calendar years beginning 

after [Date of publication of the Treasury 

decision adopting these rules as final 

regulations in the Federal Register]. 

■ Par. 12. Section 1.6050M–1 is 

amended by revising paragraphs (d)(2), 

(d)(3), and (f) as follows: 


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§ 1.6050M–1 Information returns relating 

to persons receiving contracts from certain 

federal executive agencies. 

* * * * * 

(d) * * * 

(2) Form of reporting—(i) General rule 

concerning electronic filing. The 

information returns required by this 

section with respect to contracts of a 

federal executive agency for each 

calendar quarter must be made in one 

submission (or in multiple submissions 

if permitted by paragraph (d)(4) of this 

section). Except as provided in 

paragraph (d)(2)(ii) of this section, the 

required returns must be made in 

electronic form (within the meaning of 

§ 301.6011–2(a)(1)) in accordance with 

any applicable revenue procedure or 

other guidance promulgated by the 

Internal Revenue Service for the filing of 

such returns under section 6050M. 

(ii) Exceptions from electronic filing. 

Any federal executive agency that, on 

October 1, has a reasonable expectation 

of entering into, during the one-year 

period beginning on that date, fewer 

than 100 contracts subject to the 

reporting requirements under this 

section that are to be filed during the 

calendar year 2022, or fewer than 10 

contracts subject to the reporting 

requirements under this section that are 

to be filed during the calendar years 

after 2022, may make the information 

returns required by this section for each 

quarter of that one-year period on the 

prescribed paper Form 8596 in 

accordance with the instructions 

accompanying such form. 

(iii) Undue hardship. The 

Commissioner may grant waivers of the 

electronic-filing requirements of this 

section in cases of undue hardship. The 

principal factor in determining hardship 

will be the amount, if any, by which the 

cost of filing the return electronically in 

accordance with this section exceeds 

the cost of filing the return on paper. A 

request for a waiver must be made in 

accordance with applicable IRS revenue 

procedures, publications, forms, 

instructions, or other guidance, 

including postings to the IRS.gov 

website. The waiver will specify the 

type of filing (that is, a return required 

under paragraph (a) of this section) and 

the period to which it applies. 

(3) Place of filing—(i) Returns in 

electronic form. Information returns 

made under this section in electronic 

form must be filed with the Internal 

Revenue Service in accordance with any 

applicable revenue procedure or other 

guidance promulgated by the Internal 

Revenue Service relating to the filing of 

returns under section 6050M. 

(ii) Form 8596. Information returns 

made on paper Form 8596 must be filed 

with the Internal Revenue Service at the 

location specified in the instructions for 

that form. 

* * * * * 

(f) Applicability date—(1) Contracts 

required to be reported. Except as 

otherwise provided in this paragraph (f), 

this section applies to each federal 

executive agency with respect to its 

contracts entered into on or after 

January 1, 1989 (including any increase 

in amount obligated on or after January 

1, 1989, that is treated as a new contract 

under paragraph (e) of this section). 

(2) Contracts not required to be 

reported. A federal executive agency is 

not required to report— 

(i) Any basic or initial contract 

entered into before January 1, 1989, 

(ii) Any increase contract action 

occurring before January 1, 1989, that is 

treated as a new contract under 

paragraph (e) of this section, or 

(iii) Any increase contract action that 

is treated as a new contract under 

paragraph (e) of this section if the basic 

or initial contract to which that contract 

action relates was entered into before 

January 1, 1989, and— 

(A) The increase occurs before April 

1, 1990, or 

(B) The amount of the increase does 

not exceed $50,000. 

(3) Illustration. (i) If federal executive 

agency enters into an initial contract on 

December 1, 1988, and the amount of 

money obligated under the contract is 

increased by $55,000 on April 15, 1990, 

then (A) there is no reporting 

requirement with respect to the contract 

when entered into on December 1, 1988, 

and (B) the April 15, 1990, increase, 

which is treated as a new contract under 

paragraph (e) of this section, is subject 

to the reporting requirements of this 

section because it is considered to be a 

new contract entered into on April 15, 

1990. 

(ii) If the $55,000 increase had 

occurred before April 1, 1990, there 

would have been no reporting 

requirement with respect to that 

increase. 

(4) Filing requirements for contracts 

required to be reported. The 

amendments to paragraphs (d)(2) and 

(d)(3) of this section apply for 

information returns required to be filed 

during calendar years beginning after 

[Date of publication of the Treasury 

decision adopting these rules as final 

regulations in the Federal Register]. 

PART 53—FOUNDATION AND SIMILAR 

EXCISE TAXES 

■ Par. 13. The authority citation for part 

53 is amended by adding the following 

entry: 

Authority: 26 U.S.C. 7805 * * * 

Section 53.6011–1 also issued under 26 

U.S.C. 6011. 

* * * * * 

■ Par. 14. Section 53.6011–1 is 

amended by: 

■ 1. Removing paragraph (c). 

■ 2. Redesignating paragraphs (d) and 

(e) as paragraphs (c) and (d), 

respectively. 

■ 3. Adding a new paragraph (e). 

The addition reads as follows: 

§ 53.6011–1 General requirement of return, 

statement or list. 

* * * * * 

(e) Applicability Date. The rules of 

this section apply for any returns 

required to be filed under this section 

on or after January 11, 2021. 

PART 54—PENSION EXCISE TAXES 

■ Par. 15. The authority citation for part 

54 is amended by adding the following 

entry: 

Authority: 26 U.S.C. 7805 * * * 

Section 54.6011–3 also issued under 26 

U.S.C. 6011. 

* * * * * 

■ Par. 16. Section 54.6011–3 is added to 

read as follows: 

§ 54.6011–3 Required use of electronic 

form for the filing requirements for the 

return for certain excise taxes related to 

employee benefit plans. 

(a) Excise tax returns required in 

electronic form. Any employer or 

individual required to file an excise tax 

return on Form 5330, Return of Excise 

Taxes Related to Employee Benefit 

Plans, under § 54.6011–1 of this chapter 

must file the excise tax return 

electronically if the filer is required by 

the Internal Revenue Code or 

regulations to file at least 10 returns of 

any type during the calendar year that 

the Form 5330 is due. The 

Commissioner may direct the type of 

electronic filing and may also exempt 

certain returns from the electronic filing 

requirements of this section through 

revenue procedures, publications, 

forms, instructions, or other guidance, 

including postings on the IRS.gov 

website. Returns filed electronically 

must be made in accordance with the 

applicable revenue procedures, 

publications, forms, instructions, or 

other guidance. 

(b) Undue hardship. The 

Commissioner may grant waivers of the 

requirements of this section in cases of 

undue hardship. The principal factor in 

determining hardship will be the 

amount, if any, by which the cost of 

filing the return electronically in 

accordance with this section exceeds 


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the cost of filing the return on paper. A 

request for a waiver must be made in 

accordance with applicable IRS revenue 

procedures, publications, forms, 

instructions, or other guidance, 

including postings to the IRS.gov 

website. The waiver will specify the 

type of filing (that is, a return required 

under § 54.6011–1) and the period to 

which it applies. 

(c) Failure to file. If a filer required to 

file the Form 5330 fails to file the report 

electronically when required to do so by 

this section, the filer is deemed to have 

failed to file the report. See generally 

section 6651(a)(1) for the penalty for the 

failure to file a tax return or to pay tax. 

For general rules relating to the failure 

to file tax return or to pay tax, see the 

regulations under 26 CFR 301.6651 

(Regulations on Procedure and 

Administration). 

(d) Meaning of terms. The following 

definitions apply for purposes of this 

section: 

(1) Magnetic media or electronic form. 

The terms magnetic media or electronic 

form mean any media or form permitted 

under applicable regulations, revenue 

procedures, or publications. These 

generally include electronic filing, as 

well as magnetic tape, tape cartridge, 

diskette, and other media specifically 

permitted under the applicable 

regulations, procedures, publications, 

forms, instructions, or other guidance. 

(2) Calculating the number of returns 

a filer is required to file—(i) In general. 

For purposes of this section, a filer is 

required to file at least 10 returns during 

a calendar year if the filer is required to 

file at least 10 returns of any type, 

including information returns (for 

example, Forms W–2 and Forms 1099), 

income tax returns, employment tax 

returns, and excise tax returns. 

(ii) Definition of filer. For purposes of 

this section, the term filer means the 

person required to report the tax on the 

Form 5330. For general rules on who is 

required to report the tax on the Form 

5330, see the Instructions to the Form 

5330. 

(e) Example. The following example 

illustrates the provisions of paragraph 

(d)(2) of this section: 

(1) In 2022, Employer A (the plan 

sponsor and plan administrator of Plan 

B) is required to file Form 5330 for its 

nondeductible contribution under 

section 4972 to Plan B. During the 2023 

calendar year, Employer A is required to 

file 20 returns (including 19 Forms 

1099–R Distributions From Pensions, 

Annuities, Retirement, Profit-Sharing 

Plans, IRAs, Insurance Contracts, etc. 

and one Form 5500 series Annual 

Return/Report of the Employee Benefit 

Plan). Plan B’s plan year is the calendar 

year. Because Employer A is required to 

file at least 10 returns during the 2023 

calendar year, Employer A must file the 

2022 Form 5330 for Plan B 

electronically. 

(2) [Reserved] 

(f) Applicability date. The rules of this 

section apply for any Form 5330 

required to be filed for taxable years 

ending on or after [Date of publication 

of the Treasury decision adopting these 

rules as final regulations in the Federal 

Register]. 

PART 301—PROCEDURE AND 

ADMINISTRATION 

■ Par. 17. The authority citation for part 

301 is amended by adding entries in 

numerical order to read as follows: 

Authority: 26 U.S.C. 7805 * * * 

Section 301.6011–10 also issued under 26 

U.S.C. 6011. 

Section 301.6011–11 also issued under 26 

U.S.C. 6011. 

Section 301.6011–12 also issued under 26 

U.S.C. 6011. 

Section 301.6011–13 also issued under 26 

U.S.C. 6011. 

Section 301.6011–14 also issued under 26 

U.S.C. 6011. 

Section 301.6011–15 also issued under 26 

U.S.C. 6011. 

Section 301.6012–2 also issued under 26 

U.S.C. 6012. 

* * * * * 

Section 301.6057–3 also issued under 26 

U.S.C. 6011 and 6057. 

Section 301.6058–2 also issued under 26 

U.S.C. 6011 and 6058. 

Section 301.6059–2 also issued under 26 

U.S.C. 6011 and 6059. 

* * * * * 

Section 301.6721–1 also issued under 26 

U.S.C. 6011 and 6721. 

* * * * * 

■ Par. 18. Section 301.1474–1 is 

amended by: 

■ 1. Revising the section heading. 

■ 2. Revising paragraphs (a) through (c). 

■ 3. Revising paragraph (d)(1). 

■ 4. Adding a sentence at the end of 

paragraph (e). 

The revisions and addition read as 

follows: 

§ 301.1474–1 Required use of electronic 

form for financial institutions filing Form 

1042, Form 1042–S, or Form 8966. 

(a) Financial institutions filing certain 

returns. If a financial institution is 

required to file a Form 1042, Annual 

Withholding Tax Return for U.S. Source 

Income of Foreign Persons, (or successor 

form) under § 1.1474–1(c) of this 

chapter, the financial institution must 

file the return information required by 

the applicable forms and schedules 

electronically. If a financial institution 

is required to file a Form 1042–S, 

Foreign Person’s U.S. Source Income 

Subject to Withholding, (or such other 

form as the IRS may prescribe) under 

§ 1.1474–1(d) of this chapter, the 

financial institution must file the 

information required by the applicable 

forms and schedules electronically. 

Additionally, if a financial institution is 

required to file Form 8966, ‘‘FATCA 

Report,’’ (or such other form as the IRS 

may prescribe) to report certain 

information about U.S. accounts, 

substantial U.S. owners of foreign 

entities, or owner-documented FFIs as 

required under this chapter, the 

financial institution must file the 

required information in electronic form. 

Returns filed electronically must be 

made in accordance with applicable 

regulations, revenue procedures, 

publications, forms, instructions, and 

the IRS.gov internet site. In prescribing 

regulations, revenue procedures, 

publications, forms, and instructions, 

including those on the IRS.gov internet 

site, the Commissioner may direct the 

type of electronic filing. 

(b) Undue hardship. The 

Commissioner may grant waivers of the 

requirements of this section in cases of 

undue hardship. The principal factor in 

determining hardship will be the 

amount, if any, by which the cost of 

filing the return electronically in 

accordance with this section exceeds 

the cost of filing the return on paper. A 

request for a waiver must be made in 

accordance with applicable IRS revenue 

procedures, publications, forms, 

instructions, or other guidance, 

including postings to the IRS.gov 

website. The waiver will specify the 

type of filing (that is, a return required 

under § 1.1474–1(c) or (d) of this 

chapter, or a Form 8966) and the period 

to which it applies. 

(c) Failure to file. If a financial 

institution fails to file a Form 1042 

electronically when required to do so by 

this section, the financial institution is 

deemed to have failed to file the return. 

(See section 6651 for the addition to tax 

for failure to file a return). In 

determining whether there is reasonable 

cause for failure to file the return, 

§ 301.6651–1(c) and rules similar to the 

rules in § 301.6724–1(c)(3) (undue 

economic hardship related to filing 

information returns electronically) will 

apply. If a financial institution fails to 

file a Form 1042–S or a Form 8966 

electronically when required to do so by 

this section, the financial institution is 

deemed to have failed to comply with 

the information reporting requirements 

under section 6721 of the Code. See 

section 6724(c) for failure to meet 

magnetic media requirements. In 

determining whether there is reasonable 

cause for failure to file the return, 


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§ 301.6651–1(c) and rules similar to the 

rules in § 301.6724–1(c)(3) (undue 

economic hardship related to filing 

information returns on magnetic media) 

will apply. 

(d) * * * (1) Magnetic media or 

electronic form. The terms magnetic 

media or electronic form mean any 

media or form permitted under 

applicable regulations, revenue 

procedures, or publications. These 

generally include electronic filing, as 

well as magnetic tape, tape cartridge, 

diskette, and other media specifically 

permitted under the applicable 

regulations, procedures, publications, 

forms, instructions, or other guidance. 

* * * * * 

(e) * * * This section applies to any 

Form 1042 (or successor form) filed 

during calendar years beginning after 

[Date of publication of the Treasury 

decision adopting these rules as final 

regulations in the Federal Register]. 

■ Par. 19. Section 301.6011–2 is 

amended by: 

■ 1. Revising paragraphs (a)(1). 

■ 2. Revising paragraph (b). 

■ 3. Revising the heading of paragraph 

(c) and paragraph (c)(1). 

■ 4. Redesignating paragraph (c)(2) as 

(c)(6) and adding new paragraphs (c)(2) 

through (5). 

■ 5. Revising newly redesignated 

paragraphs (c)(6)(i) and (ii). 

■ 6. Revising paragraph (g). 

The revisions and additions read as 

follows: 

§ 301.6011–2 Required use of electronic 

form. 

(a) * * * (1) Magnetic media or 

electronic form. The terms magnetic 

media or electronic form mean any 

media or form permitted under 

applicable regulations, revenue 

procedures or publications, or, in the 

case of returns filed with the Social 

Security Administration, Social Security 

Administration publications. These 

generally include electronic filing, as 

well as magnetic tape, tape cartridge, 

diskette, and other media specifically 

permitted under the applicable 

regulations, procedures, or publications. 

* * * * * 

(b) Returns required electronically. (1) 

If the use of Form 1042–S, Form 1094 

series, Form 1095–B, Form 1095–C, 

Form 1097–BTC, Form 1098, Form 

1098–C, Form 1098–E, Form 1098–Q, 

Form 1098–T, Form 1099 series, Form 

3921, Form 3922, Form 5498 series, 

Form 8027, Form W–2G, or other forms 

prescribed under paragraph (b)(4) of this 

section treated as forms specified in this 

paragraph (b)(1) is required by the 

applicable regulations or revenue 

procedures for the purpose of making an 

information return, the information 

required by the form must be submitted 

electronically, except as otherwise 

provided in paragraph (c) of this 

section. Returns filed electronically 

must be made in accordance with 

applicable revenue procedures, 

publications, forms, or instructions. 

(2) If the use of Form W–2 (Wage and 

Tax Statement), Form 499R–2/W–2PR 

(Withholding Statement (Puerto Rico)), 

Form W–2VI (U.S. Virgin Islands Wage 

and Tax Statement), Form W–2GU 

(Guam Wage and Tax Statement), Form 

W–2AS (American Samoa Wage and 

Tax Statement), or other forms 

prescribed under paragraph (b)(4) of this 

section as treated as forms specified in 

this paragraph (b)(2) is required for the 

purpose of making an information 

return, the information required by the 

form must be submitted electronically, 

except as otherwise provided in 

paragraph (c) of this section. Returns 

described in this paragraph (b)(2) must 

be made in accordance with applicable 

Social Security Administration 

procedures or publications (which may 

be obtained from the local office of the 

Social Security Administration). 

(3) If a person is required to make a 

return for the purpose of section 6050I, 

and such person is required to file 

returns described in paragraphs (b)(1) 

and (2) of this section electronically, 

then such person must also file the 

information required by section 6050I 

on Form 8300 electronically. Returns 

described in this paragraph (b)(3) must 

be made in accordance with applicable 

IRS revenue procedures, publications, 

forms, instructions, or other guidance, 

including postings to the IRS.gov 

website. 

(4) The Commissioner may prescribe 

by revenue procedure that additional 

forms are treated, for purposes of this 

section, as forms specified in paragraphs 

(b)(1) or (2) of this section. In addition, 

the Commissioner may exempt certain 

returns from the electronic requirements 

of this section through revenue 

procedures, publications, forms, 

instructions, or other guidance, 

including postings to the IRS.gov 

website. 

(c) Applicable number-threshold—(1) 

In general. No person is required to file 

information returns electronically in a 

calendar year unless the person is 

required to file at least the applicable 

number of returns during that calendar 

year. Persons required to file fewer than 

the applicable number of returns during 

the calendar year may make the returns 

on the prescribed paper form or, 

alternatively, electronically in 

accordance with paragraph (b) of this 

section. 

(2) Machine-readable forms. Returns 

made on a paper form under paragraph 

(c)(1) of this section must be machinereadable, as described in paragraph 

(a)(2) of this section, if applicable 

revenue procedures provide for a 

machine-readable paper form. 

(3) Calculating the applicable 

number—(i) In general. For purposes of 

paragraph (c)(1) of this section, the 

applicable number is 100, for returns 

required to be filed during calendar year 

2022, and 10, for returns required to be 

filed during calendar years after 2022. 

(ii) Special rule for partnerships. 

Notwithstanding paragraph (c)(3)(i) of 

this section, a partnership with more 

than 100 partners is required to file its 

information returns covered under 

paragraph (b) of this section 

electronically. 

(4) Calculating the number of 

returns—(i) Aggregation of returns. In 

calculating whether a person is required 

to file at least the applicable number of 

returns under paragraph (c)(3) of this 

section, all the information returns 

described in paragraphs (b)(1) and (b)(2) 

of this section required to be filed 

during the calendar year, are counted in 

the aggregate. Corrected information 

returns and information returns 

described in paragraph (b)(3) of this 

section are not taken into account in 

calculating whether a person is required 

to file at least the applicable number of 

returns. 

(ii) Corrected returns. (A) If an 

original information return covered by 

paragraph (b) of this section is required 

to be filed electronically, any corrected 

information return corresponding to that 

original return must also be filed 

electronically. 

(B) If an original information return is 

permitted to be filed on paper and is 

filed on paper, any corrected 

information return corresponding to that 

original return must be filed on paper. 

(5) Examples. The provisions of 

paragraphs (c)(3) and (4) of this section 

are illustrated by the following 

examples: 

(i) Example 1. During the 2023 calendar 

year, Company W, is required to file 5 Forms 

1099–INT, Interest Income, and 5 Forms 

1099–DIV, Dividends and Distributions, for a 

total of 10 returns covered by paragraph (b) 

of this section. The applicable number for 

returns required to be filed during calendar 

year 2023 is 10. Because Company W is 

required to file the applicable number of 

returns covered by paragraph (c)(3) of this 

section during the 2023 calendar year, 

Company W must file all its 2022 Forms 

1099–INT and Forms 1099–DIV 

electronically. 

(ii) Example 2. Same facts as paragraph 

(c)(5)(i) of this section (Example 1), except 

after electronically filing its 10 Forms 1099– 


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39928 Federal Register / Vol. 86, No. 139 / Friday, July 23, 2021 / Proposed Rules 

DIV and 1099–INT, Company W files 2 

corrected Forms 1099–DIV and 4 corrected 

Forms 1099–INT. Because Company W 

electronically filed its original 2022 Forms 

1099–DIV and 1099–INT, Company W must 

electronically file its corrected 2022 Forms 

1099–DIV and 1099–INT. 

(iii) Example 3. Same facts as paragraph 

(c)(5)(i) of this section (Example 1), except on 

May 16, 2023, Company W received cash in 

excess of $10,000 and must file a Form 8300 

by May 31, 2023. Because Company W is 

required to file information returns covered 

under paragraphs (b)(1) and (2) of this section 

electronically during the 2023 calendar year, 

Company W must also file all its Forms 8300 

electronically during the 2023 calendar year. 

(iv) Example 4. Same facts as paragraph 

(c)(5)(i) of this section (Example 1), except 

Company W is not required to file any Forms 

1099–INT during calendar year 2023. On 

December 19, 2022, Company W receives 

cash in excess of $10,000 and must file a 

Form 8300 by January 3, 2023. Because 

Company W is not required to file 

information returns covered under 

paragraphs (b)(1) and (b)(2) of this section 

electronically during the 2023 calendar year, 

Company W is not required to file this Form 

8300 electronically. 

(v) Example 5. During the 2023 calendar 

year, Partnership P, a partnership with 15 

partners, is required to file 8 Forms 1099– 

MISC, Miscellaneous Income, and 5 Forms 

1099–INT. The applicable number of returns 

required to be filed by partnerships during 

calendar year 2023 is 10. Because Partnership 

P is required to file at least the applicable 

number of returns covered by paragraph (b) 

of this section during the 2023 calendar year, 

Partnership P must electronically file all its 

2022 Forms 1099–MISC and 1099–INT. 

(6) * * * 

(i) The Commissioner may grant 

waivers of the requirements of this 

section in cases of undue hardship. The 

principal factor in determining hardship 

will be the amount, if any, by which the 

cost of filing the return electronically in 

accordance with this section exceeds 

the cost of filing the return on paper. 

Notwithstanding the foregoing, if an 

employer is required to make a final 

return on Form 941, or a variation 

thereof, and expedited filing of Forms 

W–2, Forms 499R–2/W–2PR, Forms W– 

2VI, Forms W–2GU, or Form W–2AS is 

required, the unavailability of the 

specifications for electronic filing will 

be treated as creating a hardship (see 

§ 31.6071(a)–1(a)(3)(ii) of this chapter). 

A request for a waiver must be made in 

accordance with applicable IRS revenue 

procedures, publications, forms, 

instructions, or other guidance, 

including postings to the IRS.gov 

website. The waiver will specify the 

type of filing (that is, a return required 

under paragraph (b) of this section) and 

the period to which it applies. 

(ii) The Commissioner may 

supplement the provisions of paragraph 

(c)(6)(i) of this section through revenue 

procedures, publications, forms, 

instructions, or other guidance, 

including postings on the IRS.gov 

website. 

* * * * * 

(g) Applicability date. The rules of 

this section apply for information 

returns required to be filed during 

calendar years beginning after [Date of 

publication of the Treasury decision 

adopting these rules as final regulations 

in the Federal Register]. 

■ Par. 20. Section 301.6011–3 is 

amended by: 

■ 1. Revising the section heading. 

■ 2. Revising paragraphs (a), (b), and 

(d)(1). 

■ 3. Redesignating paragraph (d)(5) as 

(d)(6) and adding new paragraph (d)(5). 

■ 4. Revising newly redesignated 

paragraph (d)(6). 

■ 5. Revising paragraphs (e) and (f). 

The revisions and addition read as 

follows: 

§ 301.6011–3 Required use of electronic 

form for partnership returns. 

(a) Partnership returns required 

electronically. (1) Except as otherwise 

provided in paragraph (b) of this 

section, a partnership required to file a 

partnership return pursuant to 

§ 1.6031(a)–1 of this chapter, must file 

the information required by the 

applicable forms and schedules 

electronically, if: 

(i) The partnership is required by the 

Internal Revenue Code or regulations to 

file at least 10 returns (as described in 

paragraph (d)(5) of this section) during 

the calendar year, or 

(ii) the partnership has more than 100 

partners during the partnership’s 

taxable year. 

(2) The Commissioner may direct the 

type of electronic filing and may also 

exempt certain returns from the 

electronic requirements of this section 

through revenue procedures, 

publications, forms, instructions, or 

other guidance, including postings on 

the IRS.gov website. Returns filed 

electronically must be made in 

accordance with the applicable revenue 

procedures, publications, forms, 

instructions, or other guidance. 

(b) Undue hardship. The 

Commissioner may grant waivers of the 

requirements of this section in cases of 

undue hardship. The principal factor in 

determining hardship will be the 

amount, if any, by which the cost of 

filing the return electronically in 

accordance with this section exceeds 

the cost of filing the return on paper. A 

request for a waiver must be made in 

accordance with applicable IRS revenue 

procedures, publications, forms, 

instructions, or other guidance, 

including postings to the IRS.gov 

website. The waiver will specify the 

type of filing (that is, a return required 

under § 1.6031(a)–1 of this chapter) and 

the period to which it applies. 

* * * * * 

(d) * * * (1) Magnetic media or 

electronic form. The terms magnetic 

media or electronic form mean any 

media or form permitted under 

applicable regulations, revenue 

procedures, or publications. These 

generally include electronic filing, as 

well as magnetic tape, tape cartridge, 

diskette, and other media specifically 

permitted under the applicable 

regulations, procedures, publications, 

forms, instructions, or other guidance. 

* * * * * 

(5) Calculating the number of returns. 

For purposes of this section, a 

partnership is required to file at least 10 

returns if, during the calendar year 

ending with or within the taxable year 

of the partnership, the partnership is 

required to file at least 10 returns of any 

type, including income tax returns, 

employment tax returns, excise tax 

returns, and information returns (for 

example, Forms W–2 and Forms 1099, 

but not including schedules required to 

be included with a partnership return). 

In the case of a short-period return, a 

partnership is required to file at least 

the applicable number of returns if, 

during the calendar year in which the 

partnership’s short taxable year ends, 

the partnership is required to file at 

least the applicable number of returns of 

any type, including information returns 

(for example, Forms W–2 and Forms 

1099, but not including schedules 

required to be included with a 

partnership return), income tax returns, 

employment tax returns, and excise tax 

returns. 

(6) Partnerships with more than 100 

partners. A partnership has more than 

100 partners if, over the course of the 

partnership’s taxable year, the 

partnership had more than 100 partners, 

regardless of whether a partner was a 

partner for the entire year or whether 

the partnership had over 100 partners 

on any particular day in the year. For 

purposes of this paragraph (d)(6), 

however, only those persons having a 

direct interest in the partnership must 

be considered partners for purposes of 

determining the number of partners 

during the partnership’s taxable year. 

(e) Examples. The following examples 

illustrate the provisions of this section. 

In the examples, the partnerships’ 

taxable year is the calendar year 2023 

and the partnerships had fewer than 10 


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returns required to be filed during 

calendar year 2023: 

(1) Example 1. Partnership P had five 

general partners and 90 limited partners 

on January 1, 2023. On March 15, 2023, 

10 more limited partners acquired an 

interest in P. On September 29, 2023, 

the 10 newest partners sold their 

individual partnership interests to C, a 

corporation which was one of the 

original 90 limited partners. On 

December 31, 2023, P had the same five 

general partners and 90 limited partners 

it had on January 1, 2023. P had a total 

of 105 partners over the course of 

partnership taxable year 2023. 

Therefore, P must file its 2023 

partnership return electronically. 

(2) Example 2. Partnership Q is a 

general partnership that had 95 partners 

on January 1, 2023. On March 15, 2023, 

10 partners sold their individual 

partnership interests to corporation D, 

which was not previously a partner in 

Q. On September 29, 2023, corporation 

D sold one-half of its partnership 

interest in equal shares to five 

individuals, who were not previously 

partners in Q. On December 31, 2023, Q 

had a total of 91 partners, and on no 

date in 2023 did Q have more than 100 

partners. Over the course of the year, 

however, Q had 101 partners. Therefore, 

Q must file its 2023 partnership return 

electronically. 

(3) Example 3. Partnership G is a 

general partnership with 100 partners 

on January 1, 2023. There are no new 

partners added to G in 2023. One of G’s 

partners, A, is a partnership with 53 

partners. A is one partner, regardless of 

the number of partners A has. Therefore, 

G has 100 partners and is not required 

to file its 2023 partnership return 

electronically. 

(4) Example 4. Same facts as 

paragraph (e)(3) of this section (Example 

3), except partnership G is also required 

to file 9 Forms 1099–MISC during 

calendar year 2023 in addition to its 

2022 partnership return. Because 

partnership G is required to file at least 

10 returns of any type during calendar 

year 2023, partnership G must file its 

2023 partnership return electronically. 

(f) Applicability date. The rules of this 

section apply for partnership returns 

required to be filed during calendar 

years beginning after [Date of 

publication of the Treasury decision 

adopting these rules as final regulations 

in the Federal Register]. 

■ Par. 21. Section 301.6011–5 is 

amended by revising paragraphs (a), (b), 

(d)(1) and (5), (e), and (f) to read as 

follows: 

§ 301.6011–5 Required use of electronic 

form for corporate income tax returns. 

(a) Corporate income tax returns 

required electronically. (1) A 

corporation required to file a corporate 

income tax return on Form 1120, U.S. 

Corporation Income Tax Return, under 

§ 1.6012–2 of this chapter must file its 

corporate income tax return 

electronically if the corporation is 

required by the Internal Revenue Code 

or regulations to file at least 10 returns 

(as defined in paragraph (d)(5) of this 

section) during the calendar year ending 

with or within the taxable year of the 

corporation. 

(2) All members of a controlled group 

of corporations must file their corporate 

income tax returns electronically if the 

aggregate number of returns required to 

be filed by the controlled group of 

corporations is at least 10 (as defined in 

paragraph (d)(5) of this section) during 

the calendar year ending with or within 

the taxable year of the controlled group 

of corporations. 

(3) The Commissioner may direct the 

type of electronic filing and may also 

exempt certain returns from the 

electronic requirements of this section 

through revenue procedures, 

publications, forms, instructions, or 

other guidance, including postings on 

the IRS.gov website. Returns filed 

electronically must be made in 

accordance with the applicable revenue 

procedures, publications, forms, 

instructions, or other guidance. 

(b) Undue hardship. The 

Commissioner may grant waivers of the 

requirements of this section in cases of 

undue hardship. The principal factor in 

determining hardship will be the 

amount, if any, by which the cost of 

filing the return electronically in 

accordance with this section exceeds 

the cost of filing the return on paper. A 

request for a waiver must be made in 

accordance with applicable IRS revenue 

procedures, publications, forms, 

instructions, or other guidance, 

including postings to the IRS.gov 

website. The waiver will specify the 

type of filing (that is, a return required 

under § 1.6012–2 of this chapter) and 

the period to which it applies. 

* * * * * 

(d) * * * (1) Magnetic media or 

electronic form. The terms magnetic 

media or electronic form mean any 

media or form permitted under 

applicable regulations, revenue 

procedures, or publications. These 

generally include electronic filing, as 

well as magnetic tape, tape cartridge, 

diskette, and other media specifically 

permitted under the applicable 

regulations, procedures, publications, 

forms, instructions, or other guidance. 

* * * * * 

(5) Calculating the number of returns. 

For purposes of this section, a 

corporation or controlled group of 

corporations is required to file at least 

10 returns if, during the calendar year 

ending with or within the taxable year 

of the corporation or the controlled 

group, the corporation or the controlled 

group is required to file at least 10 

returns of any type, including 

information returns (for example, Forms 

W–2 and Forms 1099), income tax 

returns, employment tax returns, and 

excise tax returns. In the case of a shortperiod return, a corporation is required 

to file at least 10 returns if, during the 

calendar year in which the corporation’s 

short taxable year ends, the corporation 

is required to file at least 10 returns of 

any type, including information returns 

(for example, Forms W–2 and Forms 

1099), income tax returns, employment 

tax returns, and excise tax returns. If the 

corporation is a member of a controlled 

group, calculating the number of returns 

the corporation is required to file 

includes all returns required to be filed 

by all members of the controlled group 

during the calendar year ending with or 

within the taxable year of the controlled 

group. 

(e) Example. The following example 

illustrates the provisions of this section: 

(1) The taxable year of Corporation X, 

a fiscal-year taxpayer, ends on 

September 30. During the calendar year 

ending December 31, 2022, X was 

required to file one Form 1120, U.S. 

Corporation Income Tax Return, 6 

Forms W–2, Wage and Tax Statement, 

3 Forms 1099–DIV, Dividends and 

Distributions, one Form 940, Employer’s 

Annual Federal Unemployment (FUTA) 

Tax Return, and four Forms 941, 

Employer’s Quarterly Federal Tax 

Return. Because X is required to file 10 

returns of any type during calendar year 

2022, the calendar year that ended 

within its taxable year ending 

September 30, 2023, X is required to file 

its Form 1120 electronically for its 

taxable year ending September 30, 2023. 

(2) [Reserved] 

(f) Applicability date. The rules of this 

section apply for corporate income tax 

returns required to be filed during 

calendar years beginning after [Date of 

publication of the Treasury decision 

adopting these rules as final regulations 

in the Federal Register]. 

■ Par. 22. Section 301.6011–10 is added 

to read as follows: 


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39930 Federal Register / Vol. 86, No. 139 / Friday, July 23, 2021 / Proposed Rules 

§ 301.6011–10 Certain organizations, 

including trusts, required to file unrelated 

business income tax returns in electronic 

form. 

(a) Unrelated business income tax 

returns required in electronic form. (1) 

Organizations, including trusts, subject 

to tax under section 511 that are 

required to file a return under § 1.6012– 

2(e) or 1.6012–3(a)(5) of this chapter to 

report gross income included in 

computing unrelated business taxable 

income, as defined in section 512, or 

that are otherwise required to file Form 

990–T, Exempt Organization Business 

Income Tax Return (and proxy tax 

under section 6033(e)), are required to 

file that return in electronic form. 

(2) Returns filed in electronic form 

must be filed in accordance with 

applicable revenue procedures, 

publications, forms, instructions, or 

other guidance. 

(b) Failure to file. If an organization or 

trust fails to file an unrelated business 

income tax return in electronic form 

when required to do so by this section, 

the organization or trust is deemed to 

have failed to file the return. (See 

section 6651 for the addition to tax for 

failure to file a return.) In determining 

whether there is reasonable cause for 

failure to file the return, § 301.6651–1(c) 

will apply. 

(c) Applicability date. The rules of 

this section apply for unrelated business 

income tax returns required to be filed 

during calendar years beginning after 

[the date of publication of the Treasury 

decision adopting these rules as final 

regulations in the Federal Register]. 

■ Par. 23. Section 301.6011–11 is added 

to read as follows: 

§ 301.6011–11 Required use of electronic 

form for certain returns for tax-advantaged 

bonds. 

(a) Return for credit payments to 

issuers of qualified bonds. (1) An issuer 

of a qualified bond required to file a 

return for credit payments on Form 

8038–CP, Return for Credit Payments to 

Issuers of Qualified Bonds, must file its 

return electronically if the issuer is 

required to file at least 10 returns (as 

defined in paragraph (d)(4) of this 

section) during the calendar year. 

(2) Returns filed electronically must 

be made in accordance with applicable 

revenue procedures, publications, 

forms, instructions, or other guidance. 

(3) The Commissioner may provide an 

exemption from the electronic 

requirements of paragraph (a) of this 

section through revenue procedures, 

publications, forms, instructions, or 

other guidance. 

(b) Other returns for tax-advantaged 

bonds. The Commissioner may 

prescribe by revenue procedure that 

additional forms for tax-advantaged 

bonds (as defined in § 1.150–1(b) of this 

chapter) required under the Internal 

Revenue Code, regulations, or other 

administrative guidance published by 

the Internal Revenue Service must be 

filed electronically if the issuer is 

required to file at least 10 returns during 

the calendar year. 

(c) Undue hardship. The 

Commissioner may grant waivers of the 

requirements of this section in cases of 

undue hardship. The principal factor in 

determining hardship will be the 

amount, if any, by which the cost of 

filing the return electronically in 

accordance with this section exceeds 

the cost of filing the return on paper. A 

request for a waiver must be made in 

accordance with applicable IRS revenue 

procedures, publications, forms, 

instructions, or other guidance, 

including postings to the IRS.gov 

website. The waiver will specify the 

type of filing (that is, a return for credit 

payments on Form 8038–CP) and the 

period to which it applies. 

(d) Meaning of terms. The following 

definitions apply for purposes of this 

section: 

(1) Magnetic media or electronic form. 

The terms magnetic media or electronic 

form mean any media or form permitted 

under applicable regulations, revenue 

procedures, or publications. These 

generally include electronic filing, as 

well as magnetic tape, tape cartridge, 

diskette, and other media specifically 

permitted under the applicable 

regulations, procedures, publications, 

forms, instructions, or other guidance. 

(2) Qualified bond. The term qualified 

bond means a tax-advantaged bond that 

is a taxable bond that provides a 

refundable federal tax credit payable 

directly to the issuer of the bond under 

former section 6431 or any other taxadvantaged bond (as defined in § 1.150– 

1(b) of this chapter) that provides a tax 

credit payment to issuers of such bonds 

similar to the credit provided with 

respect to interest on qualified bonds. 

(3) Return for credit payments to 

issuers of qualified bonds. The term 

return for credit payments to issuers of 

qualified bonds means a Form 8038–CP, 

Return for Credit Payments to Issuers of 

Qualified Bonds or such other form 

prescribed by the Commissioner for the 

purpose of filing a return for credit 

payment with respect to a qualified 

bond. 

(4) Calculating the number of returns. 

For purposes of this section, an issuer 

of a tax-advantaged bond is required to 

file at least 10 returns if, during the 

calendar year, the issuer is required to 

file at least 10 returns of any type, 

including information returns (for 

example, Forms W–2 and Forms 1099), 

income tax returns, employment tax 

returns, and excise tax returns. 

(e) Applicability date. The rules of 

this section apply for tax-advantaged 

bond returns required to be filed after 

the later of December 31, 2021 or [Date 

of publication of the Treasury decision 

adopting these rules as final regulations 

in the Federal Register]. 

■ Par. 24. Section 301.6011–12 is added 

to read as follows: 

§ 301.6011–12 Required use of electronic 

form for returns of certain excise taxes 

under Chapters 41 and 42 of the Internal 

Revenue Code. 

(a) Excise tax returns required 

electronically. (1) Any person required 

to file an excise tax return on Form 

4720, Return of Certain Excise Taxes 

Under Chapters 41 and 42 of the 

Internal Revenue Code, under 

§ 53.6011–1 of this chapter must file its 

excise tax return electronically if the 

person is required by the Internal 

Revenue Code or regulations to file at 

least 10 returns (as defined in paragraph 

(d)(3) of this section) during calendar 

years after 2021. 

(2) The Commissioner may direct the 

type of electronic filing and may also 

exempt certain returns from the 

electronic requirements of this section 

through revenue procedures, 

publications, forms, instructions, or 

other guidance, including postings on 

the IRS.gov website. Returns filed 

electronically must be made in 

accordance with the applicable revenue 

procedures, publications, forms, 

instructions, or other guidance. 

(3) Paragraph (a)(1) of this section is 

not applicable to private foundations 

that are subject to the filing 

requirements of § 301.6033–4. 

(b) Undue hardship. The 

Commissioner may grant waivers of the 

requirements of this section in cases of 

undue hardship. The principal factor in 

determining hardship will be the 

amount, if any, by which the cost of 

filing the return electronically in 

accordance with this section exceeds 

the cost of filing the return on paper. A 

request for a waiver must be made in 

accordance with applicable IRS revenue 

procedures, publications, forms, 

instructions, or other guidance, 

including postings to the IRS.gov 

website. The waiver will specify the 

type of filing (that is, a return required 

under § 53.6011–1 of this chapter) and 

the period to which it applies. 

(c) Failure to file. If a person fails to 

file an excise tax return electronically 

when required to do so by this section, 

the person is deemed to have failed to 


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file the return. (See section 6651 for the 

addition to tax for failure to file a 

return). In determining whether there is 

reasonable cause for failure to file the 

return, § 301.6651–1(c) and rules similar 

to the rules in § 301.6724–1(c)(3) (undue 

economic hardship related to filing 

information returns electronically) will 

apply. 

(d) Meaning of terms. The following 

definitions apply for purposes of this 

section: 

(1) Magnetic media or electronic form. 

The terms magnetic media or electronic 

form mean any media or form permitted 

under applicable regulations, revenue 

procedures, or publications. These 

generally include electronic filing, as 

well as magnetic tape, tape cartridge, 

diskette, and other media specifically 

permitted under the applicable 

regulations, procedures, publications, 

forms, instructions, or other guidance. 

(2) Excise tax return. The term excise 

tax return means a Form 4720, Return 

of Certain Excise Taxes Under Chapters 

41 and 42 of the Internal Revenue Code, 

along with all other related forms, 

schedules, and statements that are 

required to be attached to the Form 

4720, including amended and 

superseding returns. 

(3) Calculating the number of returns. 

For purposes of this section, a person is 

required to file at least 10 returns if, 

during the calendar year ending with or 

within the person’s taxable year, the 

person is required to file at least 10 

returns of any type, including 

information returns (for example, Forms 

W–2 and Forms 1099), income tax 

returns, employment tax returns, and 

excise tax returns. In the case of a shortperiod return, a person is required to 

file at least 10 returns if, during the 

calendar year in which the person’s 

short taxable year ends, the person is 

required to file at least 10 returns of any 

type, including information returns (for 

example, Forms W–2 and Forms 1099), 

income tax returns, employment tax 

returns, and excise tax returns. 

(e) Example. The following example 

illustrates the provisions of this section: 

(1) During the calendar year ending 

December 31, 2022, Trust X was 

required to file one Form 4720, Return 

of Certain Excise Taxes Under Chapters 

41 and 42 of the Internal Revenue Code, 

which related to the 2021 taxable year, 

and 10 Forms W–2, Wage and Tax 

Statement, which reported wages paid 

to employees during the 2021 taxable 

year. Because X is required to file 11 

returns during calendar year 2022, X is 

required to file the 2021 Form 4720 

electronically. 

(2) [Reserved] 

(f) Applicability date. The rules of this 

section apply for excise tax returns 

required to be filed during calendar 

years beginning after [Date of 

publication of the Treasury decision 

adopting these rules as final regulations 

in the Federal Register]. 

■ Par. 25. Section 301.6011–13 is added 

to read as follows: 

§ 301.6011–13 Required use of electronic 

form for split-interest trust returns. 

(a) Split-Interest Trust returns 

required electronically. (1) Any trust 

required to file an information return on 

Form 5227, Split-Interest Trust 

Information Return, under § 53.6011–1 

of this chapter must file its return 

electronically if the trust is required by 

the Internal Revenue Code or 

regulations to file at least 10 returns (as 

defined in paragraph (d)(3)) of this 

section) during the calendar year. 

(2) The Commissioner may direct the 

type of electronic filing and may also 

exempt certain returns from the 

electronic requirements of this section 

through revenue procedures, 

publications, forms, instructions, or 

other guidance, including postings on 

the IRS.gov website. Returns filed 

electronically must be made in 

accordance with applicable revenue 

procedures, publications, forms, or 

instructions. 

(b) Undue hardship. The 

Commissioner may grant waivers of the 

requirements of this section in cases of 

undue hardship. The principal factor in 

determining hardship will be the 

amount, if any, by which the cost of 

filing the return electronically in 

accordance with this section exceeds 

the cost of filing the return on paper. A 

request for a waiver must be made in 

accordance with applicable IRS revenue 

procedures, publications, forms, 

instructions, or other guidance, 

including postings to the IRS.gov 

website. The waiver will specify the 

type of filing (that is, a return required 

under § 53.6011–1 of this chapter) and 

the period to which it applies. 

(c) Failure to file. If a trust fails to file 

an excise tax return electronically when 

required to do so by this section, the 

trust is deemed to have failed to file the 

return. (See section 6652 for the 

addition to tax for failure to file a 

return). In determining whether there is 

reasonable cause for failure to file the 

return, § 301.6652–1(f) and rules similar 

to the rules in § 301.6724–1(c)(3) (undue 

economic hardship related to filing 

information returns electronically) will 

apply. 

(d) Meaning of terms. The following 

definitions apply for purposes of this 

section: 

(1) Magnetic media or electronic form. 

The terms magnetic media or electronic 

form mean any media or form permitted 

under applicable regulations, revenue 

procedures, or publications. These 

generally include electronic filing, as 

well as magnetic tape, tape cartridge, 

diskette, and other media specifically 

permitted under the applicable 

regulations, procedures, publications, 

forms, instructions, or other guidance. 

(2) Split-Interest Trust return. The 

term split-interest trust return means a 

Form 5227, Split-Interest Trust 

Information Return, along with all other 

related forms, schedules, and statements 

that are required to be attached to the 

Form 5227, including amended and 

superseding returns. 

(3) Calculating the number of returns. 

For purposes of this section, a trust is 

required to file at least 10 returns if, 

during the calendar year ending with or 

within the trust’s taxable year, the trust 

is required to file at least 10 returns of 

any type, including information returns 

(for example, Forms W–2 and Forms 

1099), income tax returns, employment 

tax returns, and excise tax returns. In 

the case of a short-period return, a trust 

is required to file at least 10 returns if, 

during the calendar year in which the 

trust’s short taxable year ends, the trust 

is required to file at least 10 returns of 

any type, including information returns 

(for example, Forms W–2 and Forms 

1099), income tax returns, employment 

tax returns, and excise tax returns. 

(e) Example. The following example 

illustrates the provisions of this section: 

(1) During the calendar year ending 

December 31, 2022, Trust X was 

required to file one Form 5227, SplitInterest Trust Information Return, one 

Form 4720, Return of Certain Excise 

Taxes Under Chapters 41 and 42 of the 

Internal Revenue Code, and 10 Forms 

1099–DIV, Dividends and Distributions. 

Because X is required to file 12 returns 

during the calendar year 2022, X is 

required to file its Form 5227 

electronically for its taxable year ending 

December 31, 2022. 

(2) [Reserved] 

(f) Applicability date. The rules of this 

section apply for Split-Interest Trust 

returns required to be filed during 

calendar years beginning after [Date of 

publication of the Treasury decision 

adopting these rules as final regulations 

in the Federal Register]. 

■ Par. 26. Section 301.6011–14 is added 

to read as follows: 

§ 301.6011–14 Required use of electronic 

form or other machine-readable form for 

material advisor disclosure statements. 

(a) Material advisor disclosure 

statements required electronically or in 


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39932 Federal Register / Vol. 86, No. 139 / Friday, July 23, 2021 / Proposed Rules 

other machine-readable form. (1) Any 

material advisor required to file a return 

on Form 8918, Material Advisor 

Disclosure Statement, under 

§ 301.6111–3(a) of this chapter must file 

its return electronically or in other 

machine-readable form, in accordance 

with revenue procedures, publications, 

forms, instructions, or other guidance, 

including postings on the IRS.gov 

website, if the material advisor is 

required by the Internal Revenue Code 

or regulations to file at least 10 returns 

(as defined in paragraph (d)(3)) of this 

section) during the calendar year. 

(2) The Commissioner may direct the 

type of electronic or other machinereadable form through revenue 

procedures, publications, forms, 

instructions, or other guidance, 

including postings on the IRS.gov 

website. Returns filed electronically or 

in other machine-readable form must be 

made in accordance with applicable 

revenue procedures, publications, 

forms, instructions, or other guidance. 

(b) Undue hardship. The 

Commissioner may grant waivers of the 

requirements of this section in cases of 

undue hardship. The principal factor in 

determining hardship will be the 

amount, if any, by which the cost of 

filing the return electronically in 

accordance with this section exceeds 

the cost of filing the return on paper. A 

request for a waiver must be made in 

accordance with applicable IRS revenue 

procedures, publications, forms, 

instructions, or other guidance, 

including postings to the IRS.gov 

website. The waiver will specify the 

type of filing (that is, a return required 

under § 301.6111–3(a) of this chapter) 

and the period to which it applies. 

(c) Failure to file. If a material advisor 

fails to file Form 8918 electronically or 

in other machine-readable form when 

required to do so by this section, the 

material advisor is deemed to have 

failed to file the return. (See section 

6707 for the penalty for failure to file 

the return.) 

(d) Meaning of terms. The following 

definitions apply for purposes of this 

section: 

(1) Magnetic media or electronic form. 

The terms magnetic media or electronic 

form mean any media or form permitted 

under applicable regulations, revenue 

procedures, or publications. These 

generally include electronic filing, as 

well as magnetic tape, tape cartridge, 

diskette, and other media specifically 

permitted under the applicable 

regulations, procedures, publications, 

forms, instructions, or other guidance. 

(2) Machine-readable form. The term 

machine-readable form means any 

machine-readable form specifically 

permitted under applicable regulations, 

procedures, publications, forms, 

instructions, or other guidance. 

(3) Material advisor disclosure 

statement. The term material advisor 

disclosure statement means a Form 

8918, Material Advisor Disclosure 

Statement, along with all other related 

forms, schedules, and statements that 

are required to be attached to the Form 

8918, including amended material 

advisor disclosure statements. 

(4) Calculating the number of returns. 

For purposes of this section, a material 

advisor is required to file at least 10 

returns if, during the calendar year 

ending with or within the material 

advisor’s taxable year, the material 

advisor is required to file at least 10 

returns of any type, including 

information returns (for example, Forms 

W–2 and Forms 1099), income tax 

returns, employment tax returns, and 

excise tax returns. 

(e) Example. The following example 

illustrates the provisions of this section: 

(1) During the calendar year ending 

December 31, 2022, Material Advisor X 

was required to file one Form 8918, 

Material Advisor Disclosure Statement, 

one Form 1040, U.S. Individual Income 

Tax Return, and 10 Forms 1099–NEC, 

Nonemployee Compensation. Because 

Material Advisor X is required to file 12 

returns during the calendar year 2022, X 

is required to file its Form 8918 

electronically or in other machinereadable form, in accordance with 

revenue procedures, publications, 

forms, instructions, or other guidance, 

including postings on the IRS.gov 

website, during its calendar year ending 

December 31, 2022. 

(2) [Reserved] 

(f) Applicability date. The rules of this 

section apply for Material Advisor 

Disclosure Statements required to be 

filed for taxable years ending on or after 

[the date of publication of the Treasury 

decision adopting these rules as final 

regulations in the Federal Register]. 

■ Par. 27. Section 301.6011–15 is added 

to read as follows: 

§ 301.6011–15 Required use of electronic 

form for withholding tax returns. 

(a) Withholding tax returns required 

electronically. (1) A withholding agent 

required to file an income tax return on 

Form 1042, Annual Withholding Tax 

Return for U.S. Source Income of 

Foreign Persons, under § 1.1461–1 of 

this chapter must file its return 

electronically if the withholding agent is 

required by the Internal Revenue Code 

or regulations to file at least 10 returns 

(as defined in paragraph (d)(5) of this 

section) during the calendar year in 

which the Form 1042 is required to be 

filed. Notwithstanding the previous 

sentence, a withholding agent that is an 

individual, estate, or trust is not 

required to file its Form 1042 

electronically. 

(2) The Commissioner may direct the 

type of electronic filing and may also 

exempt certain returns from the 

electronic requirements of this section 

through revenue procedures, 

publications, forms, instructions, or 

other guidance, including postings on 

the IRS.gov website. Returns filed 

electronically must be made in 

accordance with the applicable revenue 

procedures, publications, forms, 

instructions, or other guidance. 

(b) Undue hardship. The 

Commissioner may grant waivers of the 

requirements of this section in cases of 

undue hardship. The principal factor in 

determining hardship will be the 

amount, if any, by which the cost of 

filing the return electronically in 

accordance with this section exceeds 

the cost of filing the return on paper. A 

request for a waiver must be made in 

accordance with applicable IRS revenue 

procedures, publications, forms, 

instructions, or other guidance, 

including postings to the IRS.gov 

website. The waiver will specify the 

type of filing (that is, a return required 

under § 1.1461–1 of this chapter) and 

the period to which it applies. 

(c) Failure to file. If a withholding 

agent fails to file a withholding agent 

income tax return electronically when 

required to do so by this section, the 

withholding agent is deemed to have 

failed to file the return. (See section 

6651 for the addition to tax for failure 

to file a return.) In determining whether 

there is reasonable cause for failure to 

file the return, § 301.6651–1(c) and rules 

similar to the rules in § 301.6724–1(c)(3) 

(undue economic hardship related to 

filing information returns electronically) 

will apply. 

(d) Meaning of terms. The following 

definitions apply for purposes of this 

section: 

(1) Magnetic media or electronic form. 

The terms magnetic media or electronic 

form mean any media or form permitted 

under applicable regulations, revenue 

procedures, or publications. These 

generally include electronic filing, as 

well as magnetic tape, tape cartridge, 

and diskette, and other media 

specifically permitted under the 

applicable regulations, procedures, 

publications, forms, or instructions. 

(2) Withholding agent. The term 

withholding agent means a withholding 

agent as defined in § 1.1441–7(a) of this 

chapter. 

(3) Withholding tax return. The term 

withholding tax return means a Form 


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1042, Annual Withholding Tax Return 

for U.S. Source Income of Foreign 

Persons, along with all other related 

forms, schedules, and statements that 

are required to be attached to the Form 

1042, including amended and 

superseding returns. 

(4) Special rule for partnerships. 

Notwithstanding paragraph (d)(5) of this 

section, a withholding agent that is a 

partnership with more than 100 partners 

is required to file a return described in 

paragraph (a) of this section 

electronically. 

(5) Calculating the number of returns. 

For purposes of this section, a 

withholding agent is required to file at 

least 10 returns if, during the calendar 

year in which the Form 1042 is required 

to be filed, the withholding agent is 

required to file at least 10 returns of any 

type, including information returns (for 

example, Forms W–2, Forms 1099, 

Forms 1042–S), income tax returns (for 

example, Form 1042), employment tax 

returns, and excise tax returns. 

(e) Special rule for returns filed by 

financial institutions. For rules that 

require withholding agents that are 

financial institutions to file returns 

electronically, see § 301.1474–1. 

(f) Applicability date. The rules of this 

section apply to withholding tax returns 

required to be filed for taxable years 

ending on or after [Date of publication 

of the Treasury decision adopting these 

rules as final regulations in the Federal 

Register]. 

■ Par. 28. Section 301.6012–2 is added 

to read as follows: 

§ 301.6012–2 Required use of electronic 

form for income tax returns of certain 

political organizations. 

(a) Income tax returns of certain 

political organizations required 

electronically. (1) Any organization 

required to file an income tax return on 

Form 1120–POL, U.S. Income Tax 

Return for Certain Political 

Organizations, under § 1.6012–6 of this 

chapter must file its income tax return, 

along with all other related forms, 

schedules, and statements that are 

required to be attached to the Form 

1120–POL, including amended and 

superseding returns, electronically if the 

organization is required by the Internal 

Revenue Code or regulations to file at 

least 10 returns of any type (as defined 

in paragraph (d)(2)) during the calendar 

year. 

(2) The Commissioner may direct the 

type of electronic filing and may also 

exempt certain returns from the 

electronic requirements of this section 

through revenue procedures, 

publications, forms, instructions, or 

other guidance, including postings on 

the IRS.gov website. Returns filed 

electronically must be made in 

accordance with the applicable revenue 

procedures, publications, forms, 

instructions, or other guidance. 

(b) Undue hardship. The 

Commissioner may grant waivers of the 

requirements of this section in cases of 

undue hardship. The principal factor in 

determining hardship will be the 

amount, if any, by which the cost of 

filing the return electronically in 

accordance with this section exceeds 

the cost of filing the return on paper. A 

request for a waiver must be made in 

accordance with applicable IRS revenue 

procedures, publications, forms, 

instructions, or other guidance, 

including postings to the IRS.gov 

website. The waiver will specify the 

type of filing (that is, a return required 

under § 1.6012–6 of this chapter) and 

the period to which it applies. 

(c) Failure to file. If an organization 

fails to file an income tax return 

electronically when required to do so by 

this section, the organization is deemed 

to have failed to file the return. (See 

section 6651 for the addition to tax for 

failure to file a return.) In determining 

whether there is reasonable cause for 

failure to file the return, § 301.6651–1(c) 

and rules similar to the rules in 

§ 301.6724–1(c)(3) (undue economic 

hardship related to filing information 

returns electronically) will apply. 

(d) Meaning of terms. The following 

definitions apply for purposes of this 

section: 

(1) Magnetic media or electronic form. 

The terms magnetic media or electronic 

form mean any media or form permitted 

under applicable regulations, revenue 

procedures, or publications. These 

generally include electronic filing, as 

well as magnetic tape, tape cartridge, 

diskette, and other media specifically 

permitted under the applicable 

regulations, procedures, publications, 

forms, instructions, or other guidance. 

(2) Income tax return for certain 

political organizations. The term 

income tax return for certain political 

organizations means a Form 1120–POL, 

U.S. Income Tax Return for Certain 

Political Organizations, along with all 

other related forms, schedules, and 

statements that are required to be 

attached to the Form 1120–POL, 

including amended and superseding 

returns. 

(3) Calculating the number of returns. 

For purposes of this section, an 

organization is required to file at least 

10 returns if, during the calendar year 

ending with or within the organization’s 

taxable year, the organization is 

required to file at least 10 returns of any 

type, including information returns (for 

example, Forms W–2 and Forms 1099), 

income tax returns, employment tax 

returns, and excise tax returns. In the 

case of a short-period return, an 

organization is required to file at least 

10 returns if, during the calendar year 

in which the organization’s short 

taxable year ends, the organization is 

required to file at least 10 returns of any 

type, including information returns (for 

example, Forms W–2 and Forms 1099), 

income tax returns, employment tax 

returns, and excise tax returns. 

(e) Example. The following example 

illustrates the provisions of this section: 

(1) During the calendar year ending 

December 31, 2022, Organization X was 

required to file one Form 1120–POL, 

U.S. Income Tax Return for Certain 

Political Organizations, four (quarterly) 

Forms 8872, Political Organization 

Report of Contributions and 

Expenditures, two Forms W–2, Wage 

and Tax Statement, one Form 940, 

Employer’s Annual Federal 

Unemployment (FUTA) Tax Return, and 

four Forms 941, Employer’s Quarterly 

Federal Tax Return. Because X is 

required to file 12 returns during the 

calendar year, X is required to file its 

Form 1120–POL electronically for its 

taxable year ending December 31, 2022. 

(2) [Reserved] 

(f) Applicability date. The rules of this 

section apply for income tax returns 

required to be filed during calendar 

years beginning after [Date of 

publication of the Treasury decision 

adopting these rules as final regulations 

in the Federal Register]. 

■ Par. 29. Section 301.6033–4 is revised 

to read as follows: 

§ 301.6033–4 Required filing in electronic 

form for returns by organizations required 

to file returns under section 6033. 

(a) Returns by organizations required 

to file returns under section 6033 in 

electronic form. (1) An organization 

required to file a return under section 

6033 must file its return in electronic 

form. 

(2) Returns filed in electronic form 

must be filed in accordance with 

applicable revenue procedures, 

publications, forms, instructions, or 

other guidance. 

(b) Failure to file. If an organization 

required to file a return under section 

6033 fails to file an information return 

in electronic form when required to do 

so by this section, the organization is 

deemed to have failed to file the return. 

(See section 6652 for the addition to tax 

for failure to file a return.) In 

determining whether there is reasonable 

cause for failure to file the return, 

§ 301.6652–2(f) will apply. 


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(c) Meaning of terms. For purposes of 

this section the term return required 

under section 6033 means a Form 990, 

Return of Organization Exempt From 

Income Tax, Form 990–EZ, Short Form 

Return of Organization Exempt From 

Income Tax, and Form 990–PF, Return 

of Private Foundation or Section 

4947(a)(1) Trust Treated as Private 

Foundation, along with all other related 

forms, schedules, and statements that 

are required to be attached to the Form 

990, Form 990–EZ, or Form 990–PF, and 

all members of the Form 990 series of 

returns, including amended and 

superseding returns. A Form 4720 filed 

by a private foundation is a form 

required to be filed under section 6033. 

(d) Applicability date. The rules of 

this section apply for any returns under 

section 6033 required to be filed during 

calendar years beginning after [Date of 

publication of the Treasury decision 

adopting these rules as final regulations 

in the Federal Register]. 

■ Par. 30. Section 301.6037–2 is 

amended by revising the section 

heading, paragraphs (a), (b), (d)(1) and 

(5), (e) and (f) to read as follows: 

§ 301.6037–2 Required use of electronic 

form for returns of electing small business 

corporation. 

(a) Returns of electing small business 

corporation required electronically. (1) 

An electing small business corporation 

required to file an electing small 

business return on Form 1120–S, U.S. 

Income Tax Return for an S 

Corporation, under § 1.6037–1 of this 

chapter must file its Form 1120–S 

electronically if the small business 

corporation is required by the Internal 

Revenue Code and regulations to file at 

least 10 returns during the calendar 

year. 

(2) The Commissioner may direct the 

type of electronic filing and may also 

exempt certain returns from the 

electronic requirements of this section 

through revenue procedures, 

publications, forms, instructions, or 

other guidance, including postings on 

the IRS.gov website. Returns filed 

electronically must be made in 

accordance with the applicable revenue 

procedures, publications, forms, 

instructions, or other guidance. 

(b) Undue hardship. The 

Commissioner may grant waivers of the 

requirements of this section in cases of 

undue hardship. The principal factor in 

determining hardship will be the 

amount, if any, by which the cost of 

filing the return electronically in 

accordance with this section exceeds 

the cost of filing the return on paper. A 

request for a waiver must be made in 

accordance with applicable IRS revenue 

procedures, publications, forms, 

instructions, or other guidance, 

including postings to the IRS.gov 

website. The waiver will specify the 

type of filing (that is, a return required 

under section 6037) and the period to 

which it applies. 

* * * * * 

(d) * * * (1) Magnetic media or 

electronic form. The terms magnetic 

media or electronic form mean any 

media or form permitted under 

applicable regulations, revenue 

procedures, or publications. These 

generally include electronic filing, as 

well as magnetic tape, tape cartridge, 

diskette, and other media specifically 

permitted under the applicable 

regulations, procedures, publications, 

forms, instructions, or other guidance. 

* * * * * 

(5) Calculating the number of returns. 

For purposes of this section, a 

corporation is required to file at least 10 

returns if, during the calendar year 

ending with or within the corporation’s 

taxable year, the corporation is required 

to file at least 10 returns of any type, 

including income tax returns, 

employment tax returns, excise tax 

returns, and information returns (for 

example, Forms W–2, Forms 1099, but 

not including schedules required to be 

attached to an S corporation return). In 

the case of a short-period return, a 

corporation is required to file at least 10 

returns if, during the calendar year in 

which the corporation’s short taxable 

year ends, the corporation is required to 

file at least 10 returns of any type, 

including information returns (for 

example, Forms W–2, Forms 1099, but 

not including schedules required to be 

attached to an S corporation return), 

income tax returns, employment tax 

returns, and excise tax returns. 

(e) Example. The following example 

illustrates the provisions of this section. 

In the example, the corporation is a 

calendar-year taxpayer. 

(1) In 2022, Corporation S, an electing 

small business corporation, is required 

to file one 2021 Form 1120–S, U.S. 

Corporation Income Tax Return, two 

Forms W–2, Wage and Tax Statement, 

two Forms 1099–DIV, Dividends and 

Distributions, one Form 940, Employer’s 

Annual Federal Unemployment (FUTA) 

Tax Return, and four Forms 941, 

Employer’s Quarterly Federal Tax 

Return. Because S is required to file 10 

returns during the calendar year 2022, S 

is required to file its 2022 Form 1120– 

S electronically. 

(2) [Reserved] 

(f) Applicability date. The rules of this 

section apply for electing small business 

corporation returns required to be filed 

during calendar years beginning after 

[Date of publication of the Treasury 

decision adopting these rules as final 

regulations in the Federal Register]. 

■ Par. 31. Section 301.6057–3 is 

amended by: 

■ 1. Revising paragraphs (a), (b), and 

(d)(1); 

■ 2. Revising the heading of paragraph 

(d)(4); 

■ 3. Revising paragraph (d)(4)(i); 

■ 4. In paragraph (e), designating the 

example as paragraph (e)(1). 

■ 5. Revising newly designated 

paragraph (e)(1) and adding paragraph 

(e)(2); and 

■ 6. Revising paragraph (f). 

The revisions and addition read as 

follows: 

§ 301.6057–3 Required use of electronic 

form for filing requirements relating to 

deferred vested retirement benefit. 

(a) Electronic-filing requirements 

under section 6057. A registration 

statement required under section 

6057(a) or a notification required under 

section 6057(b) with respect to an 

employee benefit plan must be filed 

electronically if the filer is required by 

the Internal Revenue Code or 

regulations to file at least 10 returns 

during the calendar year that includes 

the first day of the plan year. The 

Commissioner may direct the type of 

electronic filing and may also exempt 

certain returns from the electronic 

requirements of this section through 

revenue procedures, publications, 

forms, instructions, or other guidance, 

including postings on the IRS.gov 

website. Returns filed electronically 

must be made in accordance with 

applicable revenue procedures, 

publications, forms, instructions, or 

other guidance. 

(b) Undue hardship. The 

Commissioner may waive the 

requirements of this section in cases of 

undue economic hardship. The 

principal factor in determining hardship 

will be the amount, if any, by which the 

cost of filing the registration statements 

or notifications electronically in 

accordance with this section exceeds 

the cost of filing the registration 

statements or notifications on paper. A 

request for a waiver must be made in 

accordance with applicable IRS revenue 

procedures, publications, forms, 

instructions, or other guidance, 

including postings to the IRS.gov 

website. The waiver will specify the 

type of filing (that is, a registration 

statement or notification under section 

6057) and the period to which it 

applies. 

* * * * * 


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(d) * * * (1) Magnetic media or 

electronic form. The terms magnetic 

media or electronic form mean any 

media or form permitted under 

applicable regulations, revenue 

procedures, or publications. These 

generally include electronic filing, as 

well as magnetic tape, tape cartridge, 

diskette, and other media specifically 

permitted under the applicable 

regulations, procedures, publications, 

forms, instructions, or other guidance. 

* * * * * 

(4) Calculating the number of 

returns—(i) In general. For purposes of 

this section, a filer is required to file at 

least 10 returns if, during the calendar 

year that includes the first day of the 

plan year, the filer is required to file at 

least 10 returns of any type, including 

information returns (for example, Forms 

W–2 and Forms 1099), income tax 

returns, employment tax returns, and 

excise tax returns. 

* * * * * 

(e) * * * 

(1) Example. In 2023, P, the plan 

administrator of Plan B, is required to 

file 12 returns (including Forms 1099– 

R, Distributions From Pensions, 

Annuities, Retirement or Profit-Sharing 

Plans, IRAs, Insurance Contracts, etc.; 

Form 8955–SSA; Form 5500, Annual 

Return/Report of Employee Benefit Plan; 

and Form 945, Annual Return of 

Withheld Federal Income Tax). Plan B’s 

plan year is the calendar year. Because 

P is required to file at least 10 returns 

during the 2023 calendar year, P must 

file the 2023 Form 8955–SSA for Plan 

B electronically. 

(2) [Reserved] 

(f) Applicability date. The rules of this 

section apply for registration statements 

and other notifications required to be 

filed under section 6057 for plan years 

that begin on or after January 1, 2022, 

but only for filings with a filing 

deadline (not taking into account 

extensions) after July 31, 2022. 

■ Par. 32. Section 301.6058–2 is 

amended by: 

■ 1. Revising the section heading. 

■ 2. Revising paragraphs (a), (b), and 

(d)(1); 

■ 3. Revising the heading of paragraph 

(d)(3); and 

■ 4. Revising paragraphs (d)(3)(i), 

(d)(3)(iii), (e), and (f). 

The revisions read as follows: 

§ 301.6058–2 Required use of electronic 

form for filing requirements relating to 

information required in connection with 

certain plans of deferred compensation. 

(a) Electronic-filing requirements 

under section 6058. A return required 

under section 6058 with respect to an 

employee benefit plan must be filed 

electronically if the filer is required by 

the Internal Revenue Code or 

regulations to file at least 10 returns 

during the calendar year that includes 

the first day of the plan year. The 

Commissioner may direct the type of 

electronic filing and may also exempt 

certain returns from the electronic 

requirements of this section through 

revenue procedures, publications, 

forms, instructions, or other guidance, 

including postings on the IRS.gov 

website. Returns filed electronically 

must be made in accordance with the 

applicable revenue procedures, 

publications, forms, instructions, or 

other guidance. 

(b) Undue hardship. The 

Commissioner may waive the 

requirements of this section in cases of 

undue economic hardship. The 

principal factor in determining hardship 

will be the amount, if any, by which the 

cost of filing the return electronically in 

accordance with this section exceeds 

the cost of filing the returns on paper. 

A request for a waiver must be made in 

accordance with applicable IRS revenue 

procedures, publications, forms, 

instructions, or other guidance, 

including postings to the IRS.gov 

website. The waiver will specify the 

type of filing (that is, a return required 

under section 6058) and the period to 

which it applies. 

* * * * * 

(d) * * * (1) Magnetic media or 

electronic form. The terms magnetic 

media or electronic form mean any 

media or form permitted under 

applicable regulations, revenue 

procedures, or publications. These 

generally include electronic filing, as 

well as magnetic tape, tape cartridge, 

diskette, and other media specifically 

permitted under the applicable 

regulations, procedures, publications, 

forms, instructions, or other guidance. 

* * * * * 

(3) Calculating the number of 

returns—(i) In general. For purposes of 

this section, a filer is required to file at 

least 10 returns if, during the calendar 

year that includes the first day of the 

plan year, the filer is required to file at 

least 10 returns of any type, including 

information returns (for example, Forms 

W–2 and Forms 1099), income tax 

returns, employment tax returns, and 

excise tax returns. See section 

6011(e)(6), Application of numerical 

limitation to returns relating to deferred 

compensation plans. 

* * * * * 

(iii) Special rules relating to 

calculating the number of returns. For 

purposes of applying paragraph (d)(3)(ii) 

of this section, the aggregation rules of 

section 414(b), (c), (m), and (o) will 

apply to a filer that is or includes an 

employer. Thus, for example, a filer that 

is a member of a controlled group of 

corporations within the meaning of 

section 414(b) must file the Form 5500 

series electronically if the aggregate 

number of returns required to be filed 

by all members of the controlled group 

of corporations is at least 10 returns. 

(e) Example. The following example 

illustrates the provisions of paragraph 

(d)(3) of this section: 

(1) In 2023, Employer X (the plan 

sponsor and plan administrator of Plan 

A) is required to file 12 returns. The sole 

shareholder of X and his spouse are the 

only participants in Plan A. Employer X 

is required to file the following: One 

Form 1120, U.S. Corporation Income 

Tax Return; two Forms W–2, Wage and 

Tax Statement; one Form 940, 

Employer’s Annual Federal 

Unemployment (FUTA) Tax Return; 

four Forms 941, Employer’s Quarterly 

Federal Tax Return; one Form 945, 

Annual Return of Withheld Federal 

Income Tax; and two Forms 1099–DIV, 

Dividends and Distributions. Employer 

X is required to file one Form 5500–EZ. 

Plan A’s plan year is the calendar year. 

Because Employer X is required to file 

at least 10 returns during the 2023 

calendar year, the 2023 Form 5500–EZ 

must be filed electronically. 

(2) [Reserved] 

(f) Applicability date. This section is 

applicable for returns required to be 

filed under section 6058 for plan years 

that begin on or after January 1, 2022, 

but only for filings with a filing 

deadline (not taking into account 

extensions) after July 31, 2022. 

■ Par. 33. Section 301.6059–2 is 

amended by: 

■ 1. Revising the section heading; 

■ 2. Revising paragraphs (a), (b), (d)(1); 

■ 3. In paragraph (d)(3), revising the 

paragraph heading and paragraph 

(d)(3)(i); 

■ 4. Removing paragraph (e) and 

redesignating paragraph (f) as paragraph 

(e); and 

■ 5. Revising newly designated 

paragraph (e). 

The revisions read as follows: 

§ 301.6059–2 Required use of electronic 

form for filing requirements relating to 

periodic report of actuary. 

(a) Electronic-filing requirements 

under section 6059. An actuarial report 

required under section 6059 with 

respect to an employee benefit plan 

must be filed electronically if the filer 

is required by the Internal Revenue 

Code or regulations to file at least 10 

returns during the calendar year that 

includes the first day of the plan year. 


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The Commissioner may direct the type 

of electronic filing and may also exempt 

certain returns from the electronic 

requirements of this section through 

revenue procedures, publications, 

forms, instructions, or other guidance, 

including postings on the IRS.gov 

website. Actuarial reports filed 

electronically must be made in 

accordance with the applicable revenue 

procedures, publications, forms, 

instructions, or other guidance. 

(b) Undue hardship. The 

Commissioner may waive the 

requirements of this section in cases of 

undue economic hardship. The 

principal factor in determining hardship 

will be the amount, if any, by which the 

cost of filing the reports electronically 

in accordance with this section exceeds 

the cost of filing the reports on paper. 

A request for a waiver must be made in 

accordance with applicable IRS revenue 

procedures, publications, forms, 

instructions, or other guidance, 

including postings to the IRS.gov 

website. The waiver will specify the 

type of filing (that is, an actuarial report 

required under section 6059) and the 

period to which it applies. 

* * * * * 

(d) * * * (1) Magnetic media or 

electronic form. The terms magnetic 

media or electronic form mean any 

media or form permitted under 

applicable regulations, revenue 

procedures, or publications. These 

generally include electronic filing, as 

well as magnetic tape, tape cartridge, 

diskette, and other media specifically 

permitted under the applicable 

regulations, procedures, publications, 

forms, instructions, or other guidance. 

* * * * * 

(3) Calculating the number of 

returns—(i) In general. For purposes of 

this section, a filer is required to file at 

least 10 returns if, during the calendar 

year that includes the first day of the 

plan year, the filer is required to file at 

least 10 returns of any type, including 

information returns (or example, Forms 

W–2 and Forms 1099), income tax 

returns, employment tax returns, and 

excise tax returns. 

* * * * * 

(e) Applicability date. This section is 

applicable for actuarial reports required 

to be filed under section 6059 for plan 

years that begin on or after January 1, 

2022, but only for filings with a filing 

deadline (not taking into account 

extensions) after July 31, 2022. 

■ Par. 34. Section 301.6721–1 is 

amended by: 

■ 1. Revising paragraph (a)(2)(ii). 

■ 2. In paragraph (b)(5), revising the 

introductory text. 

■ 3. In paragraph (b)(5), designating 

Examples 1 through 4 as paragraphs 

(b)(5)(i) through (iv). 

■ 4. Revising newly designated 

paragraphs (b)(5)(iii) and (b)(5)(iv). 

■ 5. Adding paragraphs (b)(5)(v) and 

(b)(5)(vi). 

■ 6. Adding paragraph (h). 

The revisions and additions read as 

follows: 

§ 301.6721–1 Failure to file correct 

information returns. 

(a) * * * 

(2) * * * 

(ii) A failure to include all the 

information required to be shown on the 

return or including incorrect 

information (failure to include correct 

information). A failure to file timely 

includes a failure to file in the required 

manner, for example, electronically or 

in other machine-readable form as 

provided under section 6011(e). 

However, no penalty is imposed under 

paragraph (a)(1) of this section solely by 

reason of any failure to comply with the 

requirements of section 6011(e)(2), 

except to the extent that the failure 

occurs with respect to more than the 

applicable number of returns 

(determined under regulations 

prescribed under section 6011(e)(5) with 

respect to the calendar year during 

which such returns are required to be 

filed), or with respect to a return 

described in section 6011(e)(4). If a 

partnership return under section 6031(a) 

is required to be filed electronically, 

each schedule required to be included 

with such return with respect to each 

partner will be treated as a separate 

information return for purposes of this 

section. See section 6724(e). Filers who 

are required to file information returns 

electronically and who file those 

information returns electronically are 

considered to have satisfied the 

electronic filing requirement. Except as 

provided in paragraph (c)(1) or (e)(1) of 

this section, a failure to include correct 

information encompasses a failure to 

include the information required by 

applicable information-reporting 

statutes or by any administrative 

pronouncements issued thereunder 

(such as regulations, revenue rulings, 

revenue procedures, or informationreporting forms, and form instructions). 

A failure to include information in the 

correct format may be either a failure to 

file timely an information return or a 

failure to include correct information on 

an information return. For example, an 

error on an electronic submission to the 

Internal Revenue Service that prevents 

processing by the Internal Revenue 

Service may constitute a failure to file 

timely. However, if information is set 

forth on the wrong field of the electronic 

submission, that error may constitute a 

failure to file timely or a failure to 

include correct information, depending 

upon the extent of the failure. For 

purposes of paragraph (b) of this 

section, a failure to file corrected 

information returns in the format 

required under § 301.6011–2(c)(4)(ii) 

will be deemed a failure to correct the 

corresponding original information 

returns. 

(b) * * * 

(5) Examples. The provisions of 

paragraphs (a) and (b)(1) through (4) of 

this section may be illustrated by the 

following examples. These examples do 

not take into account any possible 

application of the de minimis exception 

under paragraph (d) of this section, the 

lower small business limitations under 

paragraph (e) of this section, the penalty 

for intentional disregard under 

paragraph (f) of this section, 

adjustments for inflation under section 

6721(f), or the reasonable-cause waiver 

under § 301.6724–1(a): 

* * * * * 

(iii) Example 3. In calendar year 2023, 

Corporation U timely files on paper 12 

Forms 1099–MISC for the 2022 calendar 

year with correct information. Under 

§ 301.6011–2, a person required to file at 

least 10 returns during calendar year 

2023 must file those returns 

electronically. Corporation U does not 

correct its failures to file these returns 

electronically by August 1, 2023. See 

section 6721(b)(2). Corporation U is 

therefore subject to a penalty for a 

failure to file timely under paragraph 

(a)(2) of this section. However, under 

section 6724(c) and paragraph (a)(2) of 

this section, the penalty for a failure to 

file timely electronically applies only to 

the extent the number of returns 

exceeds 10. As Corporation U was 

required to file 12 returns electronically, 

it is subject to a penalty of $500 for 2 

returns ($250 × 2 = $500). 

(iv) Example 4. In calendar year 2023, 

Corporation W timely electronically 

files 25 Forms 1099–B (relating to 

proceeds from broker and barter 

exchange transactions) with incorrect 

information. On August 1, 2023, 

Corporation W discovers the errors and 

files 25 corrected Forms 1099–B on 

paper. Under § 301.6011–2(c)(4)(2)(A), a 

person required to file an original 

information return covered by 

§ 301.6011–2(b) electronically must file 

any corrected information return 

corresponding to that original return 

electronically. Under paragraph (a)(2)(ii) 

of this section, a failure to file a 

corrected information return 

electronically when required to do so is 


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deemed a failure to correct the 

corresponding original information 

return. As Corporation W was required 

to file its 25 corrected information 

returns electronically, it is deemed to 

have failed to correct the original 

information returns and is subject to a 

penalty of $6,250 for failure to include 

correct information on its 25 original 

Forms 1099–B ($250 × 25 = $6,250), 

without any reductions for correcting 

the information on or before August 1. 

(v) Example 5. During the 2023 

calendar year, Corporation V files 25 

Forms 1099–B (relating to proceeds 

from broker and barter exchange 

transactions) on paper. The forms were 

filed on March 15, 2023, rather than on 

the required filing date of February 28, 

2023. Under § 301.6011–2, a person 

required to file at least 10 returns during 

calendar years 2023 and after must file 

those returns electronically. Corporation 

V does not correctly file these returns 

electronically by August 1, 2023. See 

section 6721(b)(2). Corporation V is 

subject to a penalty of $500 for filing 10 

of the returns late, but within 30 days 

after the required filing date ($50 × 10). 

In addition, Corporation V is subject to 

a penalty of $3,750 for failing to file 15 

returns electronically ($250 × 15). 

(vi) Example 6. Partnership X has 120 

partners in calendar year 2022. In 

calendar year 2023, it timely filed on 

paper its 2022 Form 1065 and 230 

accompanying Schedules K–1 and 

Schedules K–3 (120 Schedules K–1 and 

110 Schedules K–3). Partnership X filed 

no other returns during calendar year 

2023. Under § 301.6011–3(a)(1)(B), a 

partnership with more than 100 partners 

must electronically file its partnership 

return, including Schedules K–1 and K– 

3. Under section 6724(e), Schedules K– 

1 and K–3 are treated as separate 

information returns for purposes of 

penalties under section 6721, even 

though they are not listed under 

§ 301.6011–2(b) as information returns 

required to be filed electronically and 

are not defined as information returns 

under section 6724(d). Because the 

applicable number for information 

returns required to be filed during 

calendar year 2023 is 10, Partnership X 

would be subject to a penalty of $55,000 

for failing to electronically file 220 

Schedules K–1 and K–3 required to be 

included with the partnership return: 

The 11th through the 230th of the 

required schedules ($250 × 220 = 

$55,000). 

* * * * * 

(h) Applicability date. The rules of 

paragraph (a)(2)(ii) of this section apply 

for information returns required to be 

filed during calendar years beginning 

after [Date of publication of the Treasury 

decision adopting these rules as final 

regulations in the Federal Register]. For 

the rules that apply under paragraph 

(a)(2)(ii) of this section for information 

returns required to be filed before 

calendar years beginning after [Date of 

publication of the Treasury decision 

adopting these rules as final regulations 

in the Federal Register], see 26 CFR part 

301, revised as of April 1, 2021. 

Douglas W. O’Donnell, 

Deputy Commissioner for Services and 

Enforcement. 

[FR Doc. 2021–15615 Filed 7–21–21; 4:15 pm] 

BILLING CODE 4830–01–P 


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